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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
or
[ ] 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
BARRINGTON, ILLINOIS 60010 (847) 304-0450
(Address of principal executive offices) (Registrant's telephone number,
including area code)
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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) [ ] Yes [X] No
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements.
a) Accountants Review Report
b) Statement of Financial Condition as of June 30, 2003 and December
31, 2002.
c) Statement of Operations for the three months and six months ended
June 30, 2003 and 2002
d) Statement of Changes in Partner's Equity for the six months ended
June 30, 2003.
e) Notes to Financial Statements
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
ITEM 4. Controls and Procedures
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings.
ITEM 6. Exhibits and Reports on Form 8-K (ss. 249.308 of this chapter).
a) Exhibits required by Item 601 of Regulation S-K
b) Reports on Form 8-K
SIGNATURES
CERTIFICATIONS
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements.
ACCOUNTANT'S REVIEW REPORT
To the General Partner of Rogers International Raw Materials
Fund, L.P.(A Limited Partnership):
We have reviewed the statement of financial condition of Rogers
International Raw Materials Fund, L.P. as of as of June 30, 2003
and the related statements of operations, and changes in
partners' equity for the six months then ended, in accordance
with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
All information included in the financial statements is the
representation of the management of Rogers International Raw
Materials Fund, L.P.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made in the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
/s/ Vorisek & Company, LLC
Vorisek & Company, LLC
Certified Public Accountants
McHenry, IL
July 24, 2003
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF FINANCIAL CONDITION
JUNE 30, 2003 AND DECEMBER 31, 2002
(unaudited)
6/30/2003 12/31/2002
--------- ----------
ASSETS
Cash at bank $ 16,170 $ 182,497
Cash at broker 478,960 1,010,459
Investment in securities 6,069,375 5,998,810
Unrealized net trading gain 92,217 332,325
Interest receivable 97,500 239
--------------- --------------
Total Assets $ 6,754,222 $7,524,330
=============== ==============
LIABILITIES
Commissions payable $ 2,609 $ 2,839
Accrued management fees 12,551 13,014
Administrative fees payable 28,411 41,161
Organizational costs payable -- 167,699
Redemptions payable 86,577 21,361
--------------- --------------
Total Liabilities 130,148 246,074
--------------- --------------
PARTNERSHIP EQUITY
Limited Partners Equity 6,624,074 7,278,256
--------------- --------------
Total Liabilities and Partnership Equity $ 6,754,222 $7,524,330
=============== ==============
See accompanying notes and accountants reports.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF OPERATIONS
JUNE 30, 2003 AND DECEMBER 31, 2002
(unaudited)
3 m/e 6 m/e 3 m/e 6 m/e
6/30/2003 6/30/2003 6/30/2002 6/30/2002
--------- --------- --------- ---------
REVENUE
Realized net trading gain/(loss) $(384,058) $ 843,180 $ 409,883 $ 731,001
Realized gain/(loss) on securities -- 49,935 (24,331) (35,881)
Change in unrealized net trading
gain/(loss) 638,646 (240,108) (254,719) 153,335
Change in unrealized gain/(loss)
on securities (25,312) (92,261) 53,172 24,175
Foreign exchange gain 5,779 12,102 3,927 4,280
Interest income - securities 48,481 95,256 56,962 104,712
Interest income 934 3,798 4,891 8,436
--------- --------- --------- ---------
Total Revenue 284,470 671,902 249,785 990,058
--------- --------- --------- ---------
EXPENSE
Commissions 13,290 24,899 14,354 22,438
Management fees 36,553 76,611 36,018 64,388
Administrative fees 23,986 51,002 25,428 47,621
Amortization expense -- -- -- 21,566
--------- --------- --------- ---------
Total Expense 73,829 152,512 75,800 156,013
--------- --------- --------- ---------
Net Income $ 210,641 $ 519,390 $ 173,985 $ 834,045
========= ========= ========= =========
See accompanying notes and accountants reports.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF CHANGES IN PARTNER'S EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(unaudited)
6 m/e
6/30/2003
---------
Beginning of Period Equity $ 7,278,256
Additions --
Net income 519,390
Withdrawals (1,173,572)
--------------
End of Period Equity $ 6,624,074
==============
Per unit data 6/30/2003 12/31/2002
------------- --------- ----------
Net asset value $ 122.69 $ 114.56
============= ==============
Units outstanding 53,991 63,531
============= ==============
See accompanying notes and accountants report.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
(unaudited)
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.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
(unaudited)
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 June 30, 2003.
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.
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.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
(unaudited)
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.
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.
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.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
FINANCIAL CONDITION
Total equity decreased by $654,182 in the six months ended June 30,
2003, due to limited partner withdrawals of $1,173,572 and net
income of $519,390.
RESULTS OF OPERATIONS
NET REVENUES (LOSSES)
The realized net trading gains (losses) of $(384,058), $843,180,
$409,883 and $731,001 are the results of three and six months of
trading ending June 30, 2003 and 2002. The realized trading gains
(losses) on securities were $0, $49,935, ($24,331) and ($35,881) for
the same periods. The interest income includes accrued interest
income on securities of $48,481, $95,256, $56,962 and $104,712 for
the same periods.
OPERATING EXPENSES
The Fund pays substantial fees and expenses that are described in
the annual report filed for the fiscal year ended December 31, 2002.
There have been no material changes in the computation of these
fees.
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.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
NOT APPLICABLE
ITEM 4.
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 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.
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings.
None
ITEM 6. Exhibits and Reports on Form 8-K (ss.249.308 of this chapter).
a) 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 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 No.
333-41780.
Exhibit 10 - Material Contracts
None
Exhibit 11 - Statement re computation of per share earnings
The required exhibit is incorporated by reference from
the information contained in Part I, Item 1, Financial
Information.
Exhibit 15 - Letter re unaudited interim financial information
Not Applicable
Exhibit 18 - Letter re change in accounting principles
Not Applicable
Exhibit 19 - Report furnished to security holders
The required exhibit is incorporated by reference from
the information contained in Part I, Item 1, Financial
Information.
Exhibit 22 - Published report regarding matters submitted to
vote of security holders Not Applicable
Exhibit 23 - Consent of experts and counsel
Not Applicable
Exhibit 24 - Power of Attorney
Not Applicable
Exhibit 25 - Financial Data Schedule
Not Applicable
Exhibit 31 - Certification of CEO and CFO Pursuant to Section
302 of the Sarbanes-Oxley Act See Exhibit 31.1 and 31.2
Exhibit 32 - Certification of CEO and CFO Pursuant to Section 906
of the Sarbanes-Oxley Act See Exhibit 32.1 and 32.2
b) Reports on Forms 8-K
No reports on Form 8-K were filed during the second
quarter of fiscal 2003.
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)
July 28, 2003 /s/ Richard Chambers
- ------------- --------------------
Date Chief Financial Officer of Beeland Management Company, LLC
July 28, 2003 /s/ Clyde Harrison
- ------------- ------------------
Date Chief Executive Officer of Beeland Management Company, LLC