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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to ___________________
Commission file number 333-41780
ROGERS INTERNATIONAL RAW
MATERIALS FUND, L.P.
(Exact name of registrant as specified in its charter)
ILLINOIS 36-4368292
(State of organization) (I.R.S. Employer
Identification No.)
BEELAND MANAGEMENT COMPANY, LLC
GENERAL PARTNER
1000 HART ROAD, SUITE 210 (847) 304-0450
BARRINGTON, ILLINOIS 60010 (Registrant's telephone number,
(Address of principal executive offices) including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act.)
[ ] Yes [X] No
The aggregate market value of Limited Partnership Units held by non-affiliates
of the registrant, as of June 30, 2002, was approximately $5.9 million. For
purposes of this disclosure, units held by officers or principals of the General
Partner have been excluded because such persons may be deemed to be affiliates.
This determination is not necessarily conclusive.
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PART I
ITEM 1. BUSINESS.
Rogers International Raw Materials Fund, L.P. (the "Fund") is an
Illinois Limited Partnership established in May 2000 under the laws of
the State of Illinois relating to limited partnerships. The Fund
invests and trades in a portfolio of commodity futures and forward
contracts. Futures contracts are contracts made on a commodity exchange
that provide generally for the future delivery of various commodities
at a specified date, time and place. When traded on an exchange,
forward contracts are the equivalent of a futures contract. When not
traded on an exchange, forward contracts are contracts for the purchase
or sale of a commodity (such as currencies) for delivery at a future
date, which contain terms and conditions specifically negotiated by the
parties. Although Beeland Management, the general partner of the Fund,
does not initially intend to do so, the Fund may also purchase forward
contracts in the off exchange or "OTC" marketplace under certain
circumstances if, in the sole discretion of Beeland Management, there
is sufficient liquidity and depth in the relevant off exchange markets.
The Fund invests and trades exclusively on the "long side" of the
market. This means that the Fund only buys positions in commodities and
does not engage in any short-selling. The Fund closes out all positions
by making an offsetting sale and does not take delivery of the actual
commodities. Funds for its business are obtained only by the sale of
units and from the retention of any profits generated from the Fund's
trading.
The Fund's trading is designed to replicate the positions which
comprise the Rogers International Commodity Index. The Index consists
of a compendium, commonly known as a basket, of raw materials employed
within the world economy and traded in seasoned markets as futures and
forward contracts. There are no "short" positions within the Index.
The Index was developed by James Beeland Rogers, Jr., the majority
owner-member of Beeland Management, to be a balanced, representative,
international raw materials index. Beeland Management believes that the
Index includes most of the publicly traded raw materials used in
international commerce for which futures contracts or forward contracts
are regularly traded in recognized markets. It is designed to address
the needs of expanding world trade. As the owner of the Index, Beeland
Management controls the components of the Index which the fund is
designed to track. The weightings of the Index were selected by Beeland
Management based on its perception of the relative importance of those
raw materials.
The Fund's principal objective is to provide an alternative investment
vehicle for investors with diversified investment portfolios. The
performance of the Fund is not correlated with the traditional
securities markets. In other words, the performance of the Fund is
largely independent from how the traditional equity and debt markets
perform. Accordingly, the Fund's returns will not necessarily increase
when that of stocks or bonds increase and will not necessarily decrease
when that of stocks or bonds decrease. However, the fact that the
Fund's performance is non-correlated with traditional securities
markets does not mean that the Fund's performance has a negative
correlation with such markets. In other words, the Fund will not
necessarily perform better when traditional markets decline, or perform
worse when the traditional markets are rising. Rather, the Fund's
results may parallel either stocks or bonds, or both, during
significant periods of time.
The Fund commenced trading during November 2001. The Partnership will
terminate December 31, 2020 or earlier upon certain circumstances as
defined in the Limited Partnership Agreement.
ITEM 2. PROPERTIES.
The Partnership owns no properties.
ITEM 3. LEGAL PROCEEDINGS.
None
2
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of partners during the fourth
quarter of fiscal 2002.
PART II
ITEM 5. MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP UNITS AND RELATED PARTNER
MATTERS.
There is no established market for the partnership units. The units are
offered on a best efforts basis by both representatives of Beeland
Management and certain broker-dealers. An offering on a best efforts
basis is one in which the securities dealers participating in the
offering are under no obligation to purchase any of the securities
being offered and, therefore, no specified number of securities are
guaranteed to be sold and no specified amount of money is guaranteed to
be raised. Derivatives Portfolio Management, L.L.C., Two Worlds Fair
Drive, P.O. Box 6741, Somerset, New Jersey, serves as the Fund's
subscription agent, as well as the Fund's redemption agent.
The Fund's initial public offering was held during Fiscal Year 2001.
The units were initially offered for sale at a fixed price of $100 per
unit. An initial closing on the subscription proceeds was held after a
minimum of 50,000 units was received.
The net proceeds of the offering, after deducting the subscription fee,
were placed in a trading account with the futures commission merchant.
The proceeds were used to acquire a portfolio of futures positions
consistent with the Fund's trading policies as well as US Treasury
Securities with the excess. Generally, not more than 25% of the Fund's
assets are maintained in the Fund's trading account with the futures
commission merchant. Trading account assets are used to satisfy
minimum margin requirements for the Fund's unrealized futures
positions. Consistent with the Commodity Exchange Act, all of the
assets of the Fund are maintained in cash and segregated customer
funds, except assets, if any, committed as margin on some non-US
futures and option transactions.
The Fund's trading account assets, which are not committed as margin
may be invested in US Treasury Securities. The Fund will always
maintain sufficient cash in US Treasury Securities to close out open
positions.
The purchase price for units is now the net asset value per unit as of
the close of trading on the trading day preceding the effective date of
the purchase. The net asset value per unit is determined by dividing
the Fund's net assets (total assets, including the value of its
portfolio of futures positions, minus total liabilities of the Fund) by
the aggregate number of units outstanding as of the time of
calculation. This net asset value may be more than or less than $100
per unit. Investors may obtain information concerning the net asset
value per unit from Derivatives Portfolio Management. Its telephone
number is (732) 563-0030. In addition, each limited partner will be
given a password for access to a web site for the Fund that will report
net asset value on a weekly basis.
There were approximately 150 Limited Partners at December 31, 2002.
The Fund has not paid any dividends. There are no securities
authorized for issuance under equity compensation plans. The following
table shows for the periods indicated the high and low sales prices for
our units.
High Low
---- ---
January 2002 $ 92.29 $ 87.55
February 2002 $ 94.21 $ 87.55
March 2002 $104.16 $ 94.21
April 2002 $104.16 $103.87
May 2002 $103.87 $103.16
June 2002 $106.85 $103.16
July 2002 $107.05 $106.85
August 2002 $111.83 $107.05
September 2002 $113.99 $111.83
October 2002 $113.99 $111.22
November 2002 $111.46 $111.22
December 2002 $114.56 $111.46
3
ITEM 6. SELECTED FINANCIAL DATA.
2002 2001
---------------- ----------------
Net revenues (losses) $ 1,803,161 $ (3,664)
Total expenses 475,606 391,956
---------------- ----------------
Net income (loss) $ 1,327,555 $ (395,620)
================ ================
Net income (loss) per unit $ 20.90 $ (7.45)
Total units outstanding 63,531 53,124
---------------- ----------------
Total assets $ 7,524,330 $ 5,208,217
Total obligations $ 246,074 $ 305,514
---------------- ----------------
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
RESULTS OF OPERATIONS
NET REVENUES (LOSSES)
2002 2001
--------------- --------------
Realized net trading gains (losses) $ 1,301,840 $ (42,935)
Unrealized trading gains 370,218 12,180
Interest income 131,103 27,091
--------------- --------------
Total net revenues (losses) 1,803,161 (3,664)
=============== ==============
The 2001 realized net trading losses are the result of one month of
trading in December 2001. The unrealized trading gains for 2002 and 2001
include unrealized gains (losses) on securities of $67,148 and
$(17,075), respectively. The interest income for 2002 and 2001 includes
accrued interest income on securities of $114,891 and $24,000,
respectively.
OPERATING EXPENSES
2002 2001
--------------- ---------------
Brokerage commissions $ 46,665 $ 7,518
Management fees 144,394 16,417
Administrative fees 145,282 24,889
Organizational cost amortization 139,265 343,132
--------------- ---------------
Total operating expenses $ 475,606 $ 391,956
=============== ===============
4
The Fund pays substantial fees and expenses which include:
Management fees of 0.1875% per month (2.25% per year) of the average
monthly sum of all capital accounts contributed by limited partners,
computed as of the close of each month. The management fee is payable
monthly to Beeland Management, as the Fund's general partner.
Subscription fee of up to 5% of the gross offering proceeds payable to
Beeland Management. A portion of the subscription fee may be reallowed
by Beeland Management to soliciting dealers as selling commissions for
each unit they sell. Subject to certain conditions and exceptions,
investors purchasing specified minimum numbers of units will be
entitled to a reduction of the 5% subscription fee. These fees are
reflected as a subtraction from the Limited Partner contributions.
Advisory fee to Hart Capital Management, an affiliate of Beeland
Management. The fee is in the amount of 50 basis points per year of the
average month end market value of the net assets of the Fund invested
and being managed by Hart Capital Management.
Brokerage commissions and transactions fees estimated at 1% of net
assets per year, payable to futures commission merchants utilized by
the Fund. Futures commission merchants execute trades of futures
contracts for the Fund. The above fees include delivery, insurance,
storage and other charges incidental to trading and exchange fees.
Affiliates of members of Beeland Management may be engaged to provide
trading execution services for the Fund.
Clearinghouse and other similar fees, and National Futures Association
(NFA) fees estimated at between 10 to 15 basis points annually. One
basis point is 1/100 of one percent.
General Partner Allocation if the amount of management fees paid to the
Fund's general partner during a year does not equal or exceed one
percent (1%) of the amount of the Fund's net profits for that year. The
general partner will receive an allocation of profits in an amount
equal to the difference between one percent of the net profits and the
amount of the management fees paid. For this purpose, net profits
equals the Fund's total profits minus losses and any expenses charged
to the Fund, if any, without taking into account the management fees
allocated and paid to the Fund's general partner for that year.
Organizational Costs for the Fund totaled $482,397. These costs were
amortized over the three-month period beginning November 2001. These
costs include legal fees, accounting fees and printing costs
LIQUIDITY AND CAPITAL RESOURCES
2002 2001
--------------- --------------
Cash and cash equivalents $ 1,192,956 $ 872,197
Percentage of total assets 15.85% 16.64%
Cash used in operating activities $ (727,239) $(4,391,126)
Cash provided by financing activities $ 1,047,998 $ 5,263,323
--------------- --------------
Net increase in cash and cash equivalents $ 320,759 $ 872,197
=============== ==============
Cash flows used in operating activities were used primarily to purchase
US Treasury Securities with a face value of $6,000,000 at December 31,
2002 and $4,000,000 at December 31, 2001. The remaining cash was
provided by realized trading gains and interest and was used for
operating expenses, net of any payables and receivables.
Cash flows provided by financing activities were from the sale of
Partnership units, net of any subscription fees paid and any
subscriptions receivable, and reduced by redemptions of Partnership
units.
5
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
NOT APPLICABLE
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report 6
Statement of Financial Condition at December 31, 2002 and 2001 7
Statement of Operations for the years ended December 31, 2002 and 2001 8
Statement of Partner's Equity for the years ended December 31, 2002 and 2001 9
Notes to Financial Statements 10
INDEPENDENT AUDITOR'S REPORT
To the General Partner of Rogers International Raw Materials Fund,
L.P.:
(A Limited Partnership)
We have audited the accompanying statement of financial condition of
Rogers International Raw Materials Fund, L.P. as of December 31, 2002
and 2001 and the related statements of operations, and changes in
partners' equity for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. These standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the financial position of Rogers
International Raw Materials Fund, L.P. as of December 31, 2002 and
2001 and the results of its operations for the years then ended in
conformity with generally accepted accounting principles.
/s/ Vorisek & Company, LLC
Vorisek & Company, LLC
Certified Public Accountants
McHenry, IL
February 18, 2003
6
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 2002 AND 2001
2002 2001
---- ----
ASSETS
Cash at bank $ 182,497 $ 144,853
Cash at broker 1,010,459 727,344
Investment in US Treasury securities 5,998,810 4,132,500
Unrealized net trading gain 332,325 29,255
Interest receivable 239 --
Subscriptions receivable -- 35,000
Organizational costs (net of accumulated amortization) -- 139,265
---------- ----------
Total Assets $7,524,330 $5,208,217
========== ==========
LIABILITIES
Commissions payable $ 2,839 $ 6,141
Accrued management fees 13,014 19,187
Administrative fees payable 41,161 17,000
Organizational costs payable 167,699 263,186
Redemptions payable 21,361 --
---------- ----------
Total Liabilities 246,074 305,514
---------- ----------
PARTNERSHIP EQUITY
Limited Partners Equity 7,278,256 4,902,703
---------- ----------
Total Liabilities and Partnership Equity $7,524,330 $5,208,217
========== ==========
See accompanying notes to financial statements.
7
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
REVENUE 2002 2001
---- ----
Realized net trading gain (loss) $ 1,315,061 $ (42,290)
Realized loss on securities (16,750) --
Change in unrealized net trading gain 303,070 29,255
Change in unrealized gain (loss)
on securities 67,148 (17,075)
Foreign exchange gain (loss) 3,529 (645)
Interest income - US Treasury securities 114,891 24,000
Interest income 16,212 3,091
----------- -----------
Total Revenue 1,803,161 (3,664)
----------- -----------
EXPENSE
Commissions 46,665 7,518
Management fees 144,394 16,417
Administrative fees 145,282 24,889
Amortization expense 139,265 343,132
----------- -----------
Total Expense 475,606 391,956
----------- -----------
Net Income (Loss) $ 1,327,555 $ (395,620)
=========== ===========
See accompanying notes to financial statements.
8
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF CHANGES IN PARTNER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
Limited General
Partners Partner Total
-------- ------- -----
12/31/2000 Equity -- $ 5,000 5,000
Additions $ 5,298,323 -- $ 5,298,323
Net loss (395,620) -- (395,620)
Withdrawals -- $ (5,000) (5,000)
----------- ----------- -----------
12/31/2001 Equity $ 4,902,703 -- $ 4,902,703
Additions 1,318,457 -- 1,318,457
Net income 1,327,555 -- 1,327,555
Withdrawals (270,459) -- (270,459)
----------- ----------- -----------
12/31/2002 Equity $ 7,278,256 -- $ 7,278,256
=========== =========== ===========
12/31/2001
Per unit data
-------------
Net asset value $ 92.29
==========
Units outstanding 53,124
==========
12/31/2002
Per unit data
-------------
Net asset value $ 114.56
==========
Units outstanding 63,531
==========
See accompanying notes to financial statements.
9
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
Note 1. Significant Accounting Policies:
NATURE OF BUSINESS AND ORGANIZATION: Rogers International Raw
Materials Fund, L.P. (the "Partnership") is an Illinois Limited
Partnership established in May 2000 under the laws of the State of
Illinois relating to limited partnerships. The Partnership trades a
portfolio of commodity futures contracts and forward contracts,
exclusively on the long side of the market; that is the Partnership
will not sell short any commodity futures contracts or forward
contracts. The Partnership commenced trading during November 2001.
The Partnership will terminate December 31, 2020 or earlier upon
certain circumstances as defined in the Limited Partnership
Agreement.
NET ASSETS: The valuation of net assets includes unliquidated
commodity futures and forward contracts owned by the Partnership, if
any, at the end of the period. The unrealized gain or loss on these
contracts if any, has been calculated based on closing prices on the
last business day of the year. Foreign currency is translated into US
dollars at the exchange rate prevailing on the last business day of
the year. Net asset value is determined by subtracting liabilities
from assets, which also equals Partnership equity.
PROFIT AND LOSS ALLOCATION: Limited Partners share in the
profits and losses in the Partnership in the proportion in which each
partner's capital account bears to all partner's capital accounts.
INCOME TAXES: No provision for income taxes has been made
since the Partnership is not subject to taxes on income. Each partner
is individually liable for the tax on its share of income or loss.
The Partnership prepares a calendar year information tax return.
However, the Fund is subject to a 1.5% Illinois State replacement tax
on its net earnings.
REVENUE RECOGNITION: Commodity futures contracts are recorded
on the trade date, and open positions are reflected in the
accompanying statement of financial condition as the difference
between the original contract value and the market value on the last
business day of the reporting period. The market value of the
commodity futures and options contracts is based upon the most recent
available settlement price on the appropriate commodity exchanges. US
Treasury Securities are reported at cost plus accrued interest, net
of unrealized gains or (losses), which approximates market. Changes
in unrealized gains or (losses) represent the total increases
(decreases) in unrealized gains or (increases) decreases in
unrealized losses on open positions during the period.
INTEREST INCOME RECOGNITION: The Partnership records interest
income in the period it is earned.
STATEMENT OF CASH FLOWS: The Partnership has elected not to
provide a statement of cash flows as permitted by Statement of
Accounting Standards 102 "Statement of Cash Flows".
Note 2. Agreements and Related Party Transactions:
The Agreement of Limited Partnership vests all
responsibility and powers for the management of the business and
affairs of the Partnership with the General Partner, Beeland
Management Company, LLC. The General Partner is the commodity pool
operator for the Partnership and is responsible for the trading
decisions of the Partnership.
Included in organizational costs payable at December 31,
2002 is $167,699 owed to the General Partner for regulatory filing
fees, legal fees and expenses initially advanced for the formation of
the Partnership.
The Partnership pays a Subscription fee to the General
Partner of up to 5% of the gross offering proceeds, a portion of
which will be reallowed to soliciting dealers as selling commissions.
The Partnership pays a monthly management fee to the General
Partner of 0.1875% of the average monthly sum of all Capital Accounts
contributed by Limited Partners at the close of each month.
If the amount of management fees paid to the Partnership's
general partner during a year does not equal or exceed one percent
(1%) of the amount of the Partnership's net profits for that year,
the general partner will receive an allocation of profits in an
amount equal to the difference between one percent of the net profits
and the amount of the management fees paid.
Hart Capital Management, Inc. (Hart") is the investment
manager for the Partnership. Hart is a division of Arbor Research &
Trading, Inc. ("Arbor"), which is a member of the General Partner.
Three members of the General Partner are also principals of Arbor.
Hart provides certain investment management, advisory and research
services with respect to the investing and trading activities of the
Partnership. Hart will be paid an annual advisory fee of 0.5% of the
average month end market value of the Portfolio under management.
10
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
Note 3. Partnership Capital and Redemption's:
Limited Partners may withdraw capital, with no less than 60
days prior written notice to the General Partner, after a three-month
initial holding period.
Until the initial closing, the purchase price of a unit was
$100. Thereafter, the purchase price of a unit is the net asset value
per unit as of the end of each calendar month. Net asset value per
unit is calculated as the net asset value at month end divided by the
number of outstanding units at month end.
The General Partner and its principals are required to make
a minimum investment of $25,000 in the Partnership. This requirement
was exceeded at December 31, 2002.
Note 4. Financial Instruments with Off-Balance Sheet Credit and
Market Risk:
Included in the definition of financial instruments are
forward contracts and futures. The Partnership invests in various
commodity-related futures and forward contracts. These contracts are
marked to market daily, with variations in the value settled on a
daily basis with the exchange upon which they are traded. For these
contracts the unrealized gain or loss rather than the notional
amounts, represents the approximate future cash requirements.
At December 31, 2002 and 2001 the Partnership owned open
positions that would have earned approximately $332,325 and $29,255,
respectively, if settled. The average fair value of open positions at
December 31, 2002 and 2001 was $126,673 and $27,098, respectively.
Theoretically, the Partnership is exposed to a market risk
(loss) equal to the notional value of financial instruments
purchased. Generally financial instruments can be closed out at the
discretion of the General Partner. However, if the market is not
liquid, it could prevent the timely closeout of any unfavorable
positions or require the Partnership to hold these positions and
possibly all positions until maturity, regardless of the changes in
their value or the General Partner's investment strategies.
The Partnership's trading is designed to replicate the
positions and trading which comprise the Rogers International
Commodity Index (the "Index"). This Index consists of a basket of
commodities employed within the world economy and traded in seasoned
markets, as futures and forward contracts. The broad based
representation of commodities contracts is intended to provide two
important characteristics: The large number of contracts and
underlying raw materials represents "diversification" and the global
coverage of these contracts reflects the current state of
international trade and commerce. In order to minimize market and
credit risks, the General Partner monitors the positions held by the
Partnership on a daily basis and no trading discretion is utilized
other than the replication of the Index. Contracts are purchased or
liquidated according to the replication of the index.
Credit risk represents the accounting loss that would be
recognized if counterparties failed completely to perform as
contracted. Concentrations of credit risk (whether on or off balance
sheet) that arise from financial instruments exist for groups of
counterparties when they have similar economic characteristics that
would cause their ability to meet contractual obligations to be
similarly affected by changes in economic or other conditions.
Futures contracts have little credit risk because futures exchanges
are the counterparties.
Note 5. Derivative Financial Instruments and Fair Value of Financial
Instruments:
A derivative financial instrument is a financial agreement
whose value is linked to, or derived from, the performance of an
underlying asset. The underlying asset can be currencies,
commodities, interest rates, stocks, or any combination. Changes in
the underlying asset indirectly affect the value of the derivative.
All trading instruments are subject to market risk, the risk
that future changes in market conditions may make an instrument less
valuable or more onerous. As the instruments are recognized at fair
market value, those changes directly affect reported income.
Futures and forward contracts used for trading purposes are
recorded in the statement of financial condition at fair value at the
reporting date. Per Financial Accounting Standards Board
Interpretation No. 39, the fair value of open contracts in a loss
position is offset against the fair value of open contracts in a gain
position. The Partnership applies this industry accepted accounting
practice in the financial statements. Realized and unrealized changes
in fair values are recognized in the period in which the changes
occur.
11
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
Notional amounts are equivalent to the aggregate face value
of the derivative financial instruments. Notional amounts do not
represent the amounts exchanged by the parties to derivatives and do
not measure the Partnership's exposure to credit or market risks. The
amounts exchanged are based on the notional amounts and other terms
of the derivatives. At December 31, 2002 and 2001 the Partnership
owned open positions with an approximate notional value of $7,118,000
and $6,155,000, respectively.
The Partnership invests in financial instruments, which
includes futures and forward contracts. All contracts are of the same
class of derivative instrument, commodity-related derivatives.
Futures contracts are commitments to either purchase or sell
designated financial instruments at a future date for a specified
price and may be settled in cash or through delivery.
The Partnership has funds at the Clearing Broker in accounts,
which are used to meet minimum margin requirements for all of the
Partnership's open positions. These requirements are adjusted, as
needed, due to daily fluctuations in the values of the underlying
assets.
Non-Regulated futures contracts have foreign exchange risk
since the contracts are traded in currency denominations other than
US dollars. Foreign currency trading gains or losses are reported
under realized and unrealized trading gains in the statement of
operations. Foreign currency gains or losses are the result of the
conversion of the foreign currency denomination to US dollars.
Foreign currency gains (losses) for the years ended December 31, 2002
and 2001 were $3,529 and ($645), respectively.
The Partnership had realized gains (losses) from trading for
the years ended December 31, 2002 and 2001 of $1,315,061 and
($42,290), respectively, as reported in the statement of operations.
These realized gains (losses) included gains (losses) from
non-regulated contracts of $118,826 and ($6,121) for the same
periods.
The Partnership had income from the change in unrealized
gains for the years ended December 31, 2002 and 2001 of approximately
$303,070 and $29,255, respectively, as reported in the statement of
operations. This included unrealized gains (losses) from
non-regulated contracts of ($64,990) and $44,502 for the same
periods.
Note 6. Prior Period Restatement:
An error was discovered in the Partnership's previously
issued statement of financial condition at December 31,
2001. The organizational fees incurred and owed to the
general partner, Beeland Management Company, LLC, were
understated by $117,699. All affected balances presented
within these current financial statements have been
restated.
UNREALIZED HOLDINGS AT 12/31/02
Regulated Futures Non-Regulated Futures
--------------------------------------- --------------------------------------
Futures Contract Values Fair Value Notional Value Fair Value Notional Value
----------------------- ---------- -------------- ---------- --------------
Purchase Contracts
------------------
Assets $ 537,418 $3,885,000 $ 6,631 $ 244,000
Liabilities (184,605) 1,953,000 (28,207) 990,000
Sell Contracts
--------------
Assets -- -- 1,088 46,000
Liabilities -- -- -- --
---------- ---------- ---------- ----------
Total $ 352,813 $5,838,000 $ (20,488) $1,280,000
========== ========== ========== ==========
Contract Maturity Dates Fair Value Notional Value Fair Value Notional Value
----------------------- ---------- -------------- ---------- --------------
February 2003 $ 490,762 $3,689,000 $ (13,264) $1,169,000
March 2003 (140,999) 2,004,000 (7,224) 111,000
April 2003 3,050 145,000 -- --
---------- ---------- ---------- ----------
Total $ 352,813 $5,838,000 $ (20,488) $1,280,000
========== ========== ========== ==========
12
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The General Partner and commodity pool operator of the Fund is Beeland
Management Company, L.L.C. The executive officers of Beeland Management
are as follows:
NAME AGE POSITION
---- --- --------
James Beeland Rogers, Jr. 59 Majority Owner
Clyde C. Harrison 58 Managing Member
Brian Cornell 44 Managing Member
Richard L. Chambers 59 Managing Member
James Beeland Rogers, Jr. has been the majority owner and a member of
Beeland Management since inception in 1998. Mr. Rogers, a co-founder of
the Quantum Fund in the 1970s, is the author of Investment Biker; On
the Road with Jim Rogers (Random House, 1994). He initially developed
and compiled the Index. Although Mr. Rogers' career spans over 30
years, during the last five years he has been semi-retired and
traveling extensively around the world. However, during that period, he
has been a regular commentator and columnist in various media dealing
with economy and finance matters and is an occasional Visiting
Professor at Columbia University. Mr. Rogers is an investor who has
been chronicled in John Train's The New Money Masters and Jack
Schwager's Market Wizards, as well as in Barons, Forbes, Fortune, The
Financial Times and The Wall Street Journal.
Clyde C. Harrison has been a Managing Member of Beeland Management
since its inception in 1998. Mr. Harrison has agreed to provide
administrative services to the Fund under a contract that contains
standard noncompete provisions. Since mid-1997, Mr. Harrison has
devoted most of his business time to the administration of the Index
and the Rogers Raw Materials Fund. For the immediately prior two years,
Mr. Harrison had been an official, first with Nutmeg Securities, Inc.,
where he served as a pension fund consultant and in the institutional
stock execution business and later, in a similar capacity with a
division of a New York-based broker-dealer. Since March 1998, Mr.
Harrison has been a registered representative of Oakbrook Investment
Brokers, Inc., a registered broker-dealer. Mr. Harrison has also been a
Member of the Managed Futures Committee of the Chicago Mercantile
Exchange. In the course of his over 25 year career, Mr. Harrison has
served as a Special Consultant to the Chairman of the Chicago Board
Options Exchange, Inc., particularly on the institutional investment
community, and as general partner of a number of private investment and
trading funds.
Brian Cornell has been a Managing Member of Beeland Management since
1998. His duties primarily involve the rules and procedures whereby the
Fund will effect trades corresponding to the Index, including but not
limited to (1) periodic adjustments to the Index and the Fund, (2)
contract market selection for contracts comprising the Index, (3)
procedures to correlate trading in the Fund with the composition of the
Index and regular, periodic valuation of the Fund and the Index.
Through a wholly owned company, Cornell Investment Advisory, L.L.C., he
also has provided the Rogers Raw Materials Fund and will provide the
Fund with a portfolio monitoring facility. The fees due to Cornell
Investment pursuant to its contract with Beeland Management are payable
by Beeland Management and not by the Fund. He has traded, managed and
provided brokerage services for futures portfolios since 1982, most
recently as a senior official at two well-known futures commission
merchants and commodity trading advisors. In addition, he has authored
numerous articles on risk management and has been featured in The New
York Times, The Wall Street Journal and in Institutional Investor.
Richard L. Chambers has been a Managing Member of Beeland Management
since 1998. Mr. Chambers serves as Treasurer of Beeland Management. He
is responsible for investment of funds not required for margin and is
also responsible for administrative activity. Mr. Chambers is also the
managing principal of Hart Capital Management, a registered investment
adviser and a division of Arbor Research & Trading, Inc. Mr. Chambers
has over 30 years experience in the fixed income securities business as
both a dealer and a portfolio manager.
13
ITEM 11. EXECUTIVE COMPENSATION.
See the notes to the financial statements incorporated above for a
description of management fees paid to the General Partner.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Richard L. Chambers, managing member of the General Partner, Beeland
Management Company, LLC, 1000 Hart Road, Suite 210, Barrington, IL owns
9,189 units, 14.46% of the outstanding units. These units have NAV of
$1,052,737 at December 31, 2002.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated by reference from
the information contained in Item 7, Operating Expenses.
ITEM 14. CONTROLS AND PROCEDURES.
(a) Evaluation and Disclosures an Procedures
As required by new Rule 13a-15 under the Securities and
Exchange Act of 1934, within 90 days prior to the date of this report,
the Registrant carried out an evaluation under the supervision and with
the participation of the Registrant's management, including the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of Beeland
Management Company LLC of the effectiveness of the design and operation
of the disclosure controls and procedures. Based upon that evaluation,
the management, including the CEO and CFO, concluded that the
disclosure controls and procedures were effective to ensure that
information required to be disclosed by the Registrant in the reports
it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. In connection
with the new rules and as a matter of practice, the Registrant
continues to review and document disclosure controls and procedures,
including internal controls and procedures for financial reporting.
From time to time, the Registrant may make changes aimed at enhancing
the effectiveness of the controls and to ensure that the systems evolve
with the business. There have been no significant changes in the
internal controls or in other factors that could significantly affect
internal controls subsequent to the date the Registrant carried out its
evaluation.
(b) Changes in Internal Controls
None.
14
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents filed as a part of the report:
(1) Financial Statements: See Index to Financial Statements under
Item 8 of this report
(2) Financial statement schedules: No additional schedules are
required.
(3) Required Exhibits:
Exhibit 2 - Plan of acquisition, reorganization,
arrangement, liquidation, or succession
None
Exhibit 3 - Articles of Incorporation and By-laws
This required exhibit is incorporated by
reference from the exhibit included with
Form S-1 Registration Statement and
Amendments thereto (Reg. No. 333-41780).
Exhibit 4 - Instruments defining the rights of security
holders, including indentures
The required exhibit is incorporated by
reference from the exhibit included with
Form S-1 Registration Statement and
Amendments thereto (Reg. No. 333-41780).
Exhibit 10 - Material Contracts
The required exhibit is incorporated by
reference from the exhibit included with
Form S-1 Registration Statement and
Amendments thereto (Reg. No. 333-41780).
Exhibit 13 - Annual report to security holders.
The required exhibit is incorporated by
reference from the information contained in
Item 8 hereof.
Exhibit 99.1 - CEO Certification
Exhibit 99.2 - CFO Certification
15
Reports on Forms 8-K
(b) No reports on Form 8-K were filed during the fourth quarter of fiscal
2002.
SIGNATURES*
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
(Registrant)
March 22, 2003 /s/ Richard Chambers
-------------- --------------------
Date Managing Member of Beeland Management Company, LLC
March 22, 2003 /s/ Clyde Harrison
-------------- ------------------
Date Managing Member of Beeland Management Company, LLC
16
CERTIFICATIONS*
I, Clyde Harrison, the chief executive officer of Rogers International Raw
Materials Fund L.P., certify that:
1. I have reviewed this annual report on Form 10-K of Rogers International Raw
Materials Fund L.P;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 22, 2003
--------------
/s/ Clyde Harrison
------------------
Chief Executive Officer
17
I, Richard Chambers, the chief financial officer of Rogers International Raw
Materials Fund L.P., certify that:
1. I have reviewed this annual report on Form 10-K of Rogers International Raw
Materials Fund L.P;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 22, 2003
--------------
/s/ Richard Chambers
--------------------
Chief Financial Officer
18