FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996.
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 033-37802
CERES FUND, L.P.
--------------------------------------
(State of incorporation) - Tennessee
(I.R.S. Employer Identification No.) - 62-1444129
889 Ridge Lake Blvd., Memphis, Tennessee 38120
(901)543-8076
------------------------------------------
(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.
Yes ( X ) No ( )
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Financial Condition
September 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Assets Assets
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Cash $ 19,802 $ 15,538
U. S. Treasury obligations at
cost plus accrued interest 2,388,337 2,288,186
Equity in commodity trading
account:
Cash 2,228,107 662,426
Unrealized gain <loss> of
open futures contracts < 50,655> 232,026
Market Value of open option
contracts 86,875 1,840
Other assets 9,821 5,056
--------- ---------
$ 4,682,287 $ 3,205,072
======== =========
Liabilities and Partners' Capital
Liabilities:
Accrued management fees $ 14,427 $ 10,077
Accrued incentive fees 73,650 97,960
Other accrued expenses 22,834 15,489
Redemptions payable 66,130 83,926
------ ------
177,041 207,452
_______ _______
Partners' capital:
General partners 352,542 166,392
Limited partners 4,152,704 2,831,228
--------- ---------
Total partners' capital 4,505,246 2,997,620
--------- ----------
$ 4,682,287 $ 3,205,072
========= =========
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from January 1, 1996
through September 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gain <losses> on closed positions $3,237,643
Change in unrealized gain <losses> on
open positions <275,045>
Interest 131,997
---------
Income From Operations $3,094,595
---------
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 371,587
Management fee allocations 107,938
Incentive fee allocations 351,268
Professional and administrative expenses 58,119
-------
888,912
=======
Net Income $2,205,683
=========
Aggregate Income Allocated to General Partners $ 186,150
=======
Aggregate Income Allocated to Limited Partners $2,019.533
=========
Net Income per Limited Partnership Unit(Average) $ 114.24
======
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from July 1, 1996
through September 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
Income
Net gains <losses> on trading of commodity futures and
option contracts:
Realized gain <losses> on closed positions $ 943,456
Change in unrealized gain <losses>
on open positions <277,015>
Interest 52,449
-------
Income From Operations $ 718,890
-------
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 120,199
Management fee allocations 41,674
Incentive fee allocations 73,650
Professional and administrative expenses 22,575
-------
258,098
-------
Net Income $ 460,792
=======
Aggregate Income Allocated to General Partners $ 43,438
======
Aggregate Income Allocated to Limited Partners $ 417,354
=======
Net Income per Limited Partnership Unit(Average) $ 23.61
=====
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from January 1, 1995
through September 30, 1995
(UNAUDITED)
<TABLE>
<S> <C>
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gain <losses> on closed positions $ 933,143
Change in unrealized gain <losses> on
open positions 337,656
Interest 76,160
-------
Income From Operations $1,346,959
---------
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 262,039
Management fee allocations 57,180
Incentive fee allocations 10,855
Professional and administrative expenses 29,996
-------
$ 360,070
-------
Net Income $ 986,889
=======
Aggregate Income Allocated to General Partners $ 50,088
======
Aggregate Income Allocated to Limited Partners $ 936,801
=======
Net Income Per Limited Partnership Unit (Average) $ 44.72
=====
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from July 1, 1995
through September 30, 1995
(UNAUDITED)
<TABLE>
<S> <C>
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gains <losses> on closed positions $ 452,614
Change in unrealized gain <losses> on
open positions 238,720
Interest 25,289
-------
Income From Operations $ 716,623
-------
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 81,233
Management fee allocations 20,475
Incentive fee allocations 4,858
Professional and administrative expenses 10,803
------
$ 117,369
-------
Net Income $ 599,254
=======
Aggregate Income Allocated to General Partners $ 31,747
======
Aggregate Income Allocated to Limited Partners $ 567,507
=======
Net Income Per Limited Partnership Unit (Average) $ 27.09
=====
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Cash Flows
(UNAUDITED)
Cash flows from operating activities:
<TABLE>
<CAPTION>
YEAR TO DATE
Nine Months Ended September 30, 1996
------------------------------------
<S> <C>
Net Income $ 2,205,683
Adjustments to reconcile net income
<loss> to net cash provided by
operating activities:
Net unrealized gains <losses> on open contracts < 275,045>
(Increase) decrease in operating assets:
U. S. Treasury obligation < 100,151>
Investments in commodities fund <1,565,681>
Unrealized gain <losses> on open futures and
options contracts 557,726
Market Value of open option contracts < 85,035>
Other Assets < 4,765>
Increase (decrease) in operating liabilities:
Accrued management fees 4,350
Accrued incentive fees < 24,310>
Other accrued expenses 7,345
Amounts received for future subscriptions --
Redemptions payable < 17,796>
Total Adjustments <1,503,362>
Net Cash from operating activities 702,321
Cash Flows from Financing Activities:
Net proceeds from sale of limited partnership units --
Redemption of limited partnership units < 409,550>
Distribution to limited partners < 288,507>
Contributions received from general partners --
Net increase in cash 4,264
Cash at the beginning of the year 15,538
Cash at the end of the quarter 19,802
</TABLE>
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Cash Flows
(UNAUDITED)
Cash flows from operating activities:
<TABLE>
YEAR TO DATE
Nine Months Ended September 30, 1995
------------------------------------
<S> <C>
Net Income $ 986,889
Adjustments to reconcile net Income (Loss>
to net cash provided by operating activities:
Net unrealized gains <losses> on open contracts 337,656
(Increase) decrease in operating assets:
U. S. Treasury obligation <50,018>
Investments in commodities fund 326,718>
Unrealized gain <losses> on open futures and
options contracts <557,762>
Market Value of open option contracts <192,325>
Other Assets <253>
Increase (decrease) in operating liabilities:
Accrued management fees 2,503
Accrued incentive fees 4,858
Other accrued expenses <6,394>
Redemptions payable <15,774>
Total Adjustments <804,227>
Net Cash used in operating activities 182,662
Cash Flows from Financing Activities:
Net proceeds from sale of limited partnership
units 191,647
Redemption of limited partnership units <380,312>
Contributions received from general partners --
Net decrease in cash <6,003>
Cash at the beginning of the year 18,064
Cash at the end of the quarter 12,061
</TABLE>
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Notes to Financial Statements
September 30,1996
(1) Summary of Significant Accounting Policies
Organization
Ceres Fund, L.P. (the Partnership) is a Tennessee limited
partnership organized on September 19, 1990 to engage in the
speculative trading of commodities futures contracts and other
commodity interests. Randell Commodity Corporation ("Randell")
and RanDelta Capital Partners, L.P. ("RanDelta") are the general
partners. Randell serves as the managing general partner and
RanDelta serves as the financial general partner. Randell will
act as commodity trading advisor with respect to the Partnership.
The Partnership solicited subscriptions for a maximum of 100,000
units of limited partnership interest at $105 per unit. During
the initial offering period 13,471.6805 units were sold and the
Partnership commenced trading commodity futures contracts on
December 1, 1991. The Partnership continues to sell units as of
the end of each month at the then average net asset value per
unit plus a selling commission of 5% in accordance with the terms
of the Limited Partnership Agreement, and can continue selling
units until the maximum number of units offered have been sold.
At September 30, 1996, a total of 43,547.7090 units have been
sold with 25,869.9887 redeemed, leaving an outstanding balance at
September 30, 1996, of 17,677.7203 units.
The general partners agreed to make a capital contribution of the
lesser of $100,000 or 3% of total partnership capitalization and
made an initial capital contribution of $45,000 and has made
additional capital contributions during the period of $55,000 to
meet its investment commitment in the Partnership. In no event
will the general partners' interest in the Partnership be less
than 1% of total partnership capitalization.
Income and expenses of the Partnership (excluding the Management
Allocation and Incentive Allocation) will be allocated pro rata
among the partners based on their respective capital accounts as
of the beginning of the month in which the items of income and
expense accrue, except that limited partners have no liability
for partnership obligations in excess of his or her capital
account, including earnings. The Management Allocation and
Incentive Allocation are allocated to the Limited Partners only
in accordance with the terms of the Limited Partnership
Agreement.
The Partnership is not liable for any organizational and offering
expenses in connection with the issuance and distribution of the
units. Refco, Inc., the Partnership's commodity broker, paid the
organizational expenses of the Partnership and the expenses of
offering the units to the public. The Partnership will not
reimburse Refco, Inc. for any portion of the costs so incurred
and will not be liable for any such costs at any time.
Units may not be redeemed during the first six months after they
are purchased. Thereafter, limited partners may redeem their
units at the redemption net asset value per unit as of the end of
any calendar quarter upon ten days written notice to the managing
general partner. The redemption charge will be based on the
redemption net asset value on all units redeemed as more fully
described in the offering prospectus.
Under the terms of the partnership agreement, the Partnership
will terminate on the earlier of December 31, 2020, or the
occurrence of certain events as more fully described in the
Limited Partnership Agreement.
Valuation of Futures Contracts
Open commodity futures contracts are valued at market daily and
unrealized gains and losses are reflected in income.
Income Taxes
No provision for income taxes has been made in the accompanying
financial statements since, as a partnership, income and losses
for tax purposes are allocated to the partners for inclusion in
their respective tax returns.
(2) Management Agreement
The Partnership has entered into a Management Agreement in
consideration of and as compensation for the services to be
rendered by the General Partners and trading advisors. The
Partnership will pay to the general partners a monthly Management
Allocation equal to 1/3 of 1% (4% per annum) of the adjusted net
asset value of units at month end, plus a quarterly Incentive
Allocation of 15% of any net new appreciation in the adjusted net
asset value of units for the quarter. During the nine months
ended September 30, 1996, management fees totaled $107,938 and
incentive fees totaled $351,268.
(3) Customer Agreement with Refco, Inc.
The Partnership entered into a customer agreement with Refco,
Inc. (Refco), pursuant to which the Partnership deposits its
assets in a commodity trading account with Refco who executes
trades on behalf of the Partnership. The Partnership agrees to
pay such brokerage and commission charges and fees as Refco may
establish and charge from time to time. During 1996, Refco
charged the Partnership commissions on commodity trades at the
rate of $32.50 per round-turn. Total commissions charged to the
Partnership by Refco during this nine month period were $356,299.
The Partnership earns interest on 80% of the average daily equity
maintained as cash in the Partnership's trading account at a rate
equal to the average yield on 13-week United States Treasury
Bills. Total interest earned by the Partnership from this source
during this nine month period amounted to $131,997.
(4) Related Parties
The sole shareholder of the parent of the managing General
Partner is an active partner in the law firm which is the counsel
to the Partnership, the General Partners, the Memphis branch of
Refco and the Partnership's commodity broker.
(5) Distribution to Limited Partners.
On January 15, 1996, the General Partner declared a distribution
to the limited partners equal to the difference between the
December 31, 1995, net asset value per unit and $125 per unit.
This distribution, totaling $288,507 resulted in each unit holder
having a net asset value of $125 per unit on January 1, 1996.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the Quarter Ended September 30, 1996.
RESULTS OF OPERATIONS
Nine Months Ending September 30, 1996
Trading in July 1996 resulted in an increase in net asset
value of approximately 6.3% resulting in net income (including
fees and expenses) of $260,043 principally in grains.
Trading in August 1996 resulted in an increase in net asset
value of approximately 2.1% resulting in net income (including
fees and expenses) of $94,297 principally in grains.
Trading in September 1996 resulted in an increase in net
asset value of approximately 2.2% resulting in net income
(including fees and expenses) of $106,452 principally in grains.
CAPITAL RESOURCES
The Partnership does not intend to raise any additional
capital through borrowing, but will continue to sell Units at the
average net asset value of Units as of the end of each calendar
month. Due to the nature of the Partnership's business, it will
make no significant capital expenditures, and substantially all
its assets are and will be represented by cash, United States
Treasury bills, securities purchased under agreement to resell
and commodity futures investments. Inflation is not a
significant factor in the Partnership's profitability.
Commission File No. 033-37802
CERES FUND, L.P.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying interim consolidated financial statements are
unaudited, but include all adjustments which management considers
necessary for the fair presentation of results at September 30,
1996.
Moreover, these financial statements do not purport to contain
complete disclosures in conformity with generally accepted
accounting principles and should be read in conjunction with the
Registrant's audited consolidated financial statements at and for
the period ended December 31, 1995.
The results reflected for the nine month period ended September
30, 1996, and the period ended December 31, 1995, are not
necessarily indicative of the results for the entire fiscal year
which will end December 31, 1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
A. The registration statement became effective on March 9, 1991
at which time the Partnership began offering the securities
for sale. The offering was extended for 60 days and sales
of 13,471.6805 Units for $1,413,296.45 were consummated by
November 30, 1991 at which time the initial offering period
ended and the continuous offering period commenced. The
Partnership commenced operations December 1, 1991. The
Partnership continues to offer Units for sale. During the
period of January 1, 1996 through September 30, 1996, no
additional Units were sold and 2,664.0515 Units were redeemed.
B. The Units were offered by the Partnership through members of
the National Association of Securities Dealers, Inc. on a
best efforts basis.
C. These securities were registered under the Securities Act of
1933.
D. (1) Units of Limited Partnership interest outstanding at
July 31, 1996 - 17,960.3927.
(2) Units of Limited Partnership interest outstanding at
August 31, 1996 - 17,960.3927.
(3) Units of Limited Partnership interest outstanding at
September 30, 1996 - 17,677.7203.
E. Issuance of Limited Partnership Units for cash in the
following amounts and on the following dates:
Dates Units Amount
July 1, 1996 -- --
August 1, 1996 -- --
September 1,1996 -- --
F. Redemption of Limited Partnership Units for cash in the
following amounts and on the following dates:
Dates Units Amount
September 30, 1996 282.6724 $ 66,130
G. On May 9, 1994, transactions were consulated pursuant to
which Delta International, Inc. terminated its services as
trading advisor to the Fund and withdrew as the co-general
partner of RanDelta Capital Partners, L.P., the financial
general partner to the Fund effective March 31, 1994.
These transactions were affected without any cost or
expense to the Fund.
Item 6. Exhibits and Reports on Form 8-K.
None.
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 of the undersigned thereunto duly authorized.
Date: November 13, 1996
CERES FUND, L.P.
By: Randell Commodity Corporation
Managing General Partner
By: /s/Frank L. Watson, Jr.
______________________
Frank L. Watson, Jr.
Chairman
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 19,802
<SECURITIES> 4,662,485
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,682,287
<CURRENT-LIABILITIES> 177,041
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,505,246
<TOTAL-LIABILITY-AND-EQUITY> 4,682,287
<SALES> 0
<TOTAL-REVENUES> 3,094,595
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 888,912
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,205,683
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
