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 March 31, 1997.
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 address and 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 ( )
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 March 31, 1997.
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, 1996.
The results reflected for the three month period ended March 31,
1997 and the period ended December 31, 1996, are not necessarily
indicative of the results for the entire fiscal year which will end
December 31, 1997.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Financial Condition
March 31, 1997
<TABLE>
<CAPTION>
Assets Assets
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Cash $ 286,017 $ 108,554
U. S. Treasury obligations at
cost plus accrued interest 4,559,734 3,077,250
Equity in
commodity trading account:
Cash 1,827,568 1,514,594
Unrealized gain <loss>
open futures contracts < 452,910> 186,032
Market Value of open option
contracts < 499,100> 0
Other assets 8,813 8,657
__________ __________
$ 5,730,122 $ 4,895,087
============ ===========
Liabilities and Partners' Capital
Liabilities:
Accrued management fees $ 17,064 $ 10,033
Accrued incentive fees 0 32,849
Other accrued expenses 58,856 36,006
Amounts received for
future subscriptions 208,973 6,538
Redemptions payable 129,529 32,572
__________ _________
414,422 117,998
__________ _________
Partners' capital:
General partners 370,385 374,741
Limited partners 4,945,315 4,402,348
__________ _________
Total partners' capital 5,315,700 4,777,089
__________ _________
$ 5,730,122 $ 4,895,087
============ ===========
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from January 1, 1997
through March 31, 1997
<TABLE>
<S> <C>
Income
Net gains <loss> on trading of commodity
futures and option contracts:
Realized gain <loss> on closed positions $ 783,692
Change in unrealized gain <loss> on
open positions < 687,918>
Interest 59,498
_________
Income <Loss> From Operations $ 155,272
_________
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 197,418
Management fee allocations 46,918
Professional and administrative expenses 25,377
_________
269,713
_________
Net Income <Loss> $<114,441>
=========
Aggregate Income <Loss> Allocated to General Partners $< 4,356>
Aggregate Income <Loss> Allocated to Limited Partners $<110,085>
Net Income <Loss> per Limited Partnership Unit
(Average) $< 4.58>
</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 March 31, 1996
<TABLE>
<S> <C>
Income
Net gains <loss> on trading of commodity
futures and option contracts:
Realized gain <loss> on closed positions $ 434,900
Change in unrealized gain <loss>
on open positions < 90,711>
Interest 32,630
_________
Income <Loss> From Operations 376,819
_________
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 90,536
Management fee allocations 26,634
Incentive fee allocations 34,297
Professional and administrative expenses 14,215
_________
165,682
_________
Net Income <Loss> $ 211,137
=========
Aggregate Income <Loss> Allocated to General Partners $ 16,788
Aggregate Income <Loss> Allocated to Limited Partners $ 194,349
Net Income <Loss> per Limited Partnership
Unit (Average) $ 10.63
</TABLE>
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Cash Flows
Cash flows from operating activities:
<TABLE>
<CAPTION>
YEAR TO DATE
Three Months Ended
March 31, 1997
------------------
<S> <C>
Net Income <Loss> $ < 114,441>
Adjustments to reconcile net gain
<loss> to net cash provided by
operating activities:
Net unrealized gain <loss> on open contracts < 687,918>
(Increase) decrease in operating assets:
U. S. Treasury obligation <1,482,484>
Investments in commodities fund < 312,974>
Unrealized gain <loss> on open futures and
options contracts 1,326,860
Market Value of open option contracts 499,100
Other Assets < 156>
Increase (decrease) in operating liabilities:
Accrued management fees 7,031
Accrued incentive fees < 32,849>
Other accrued expenses 22,850
Amounts received for future subscriptions 202,435
Redemptions payable 96,957
Total Adjustments < 361,148>
Net Cash from <used in> operating activities < 475,589>
Cash Flows from <used in> Financing Activities:
Net proceeds from sale of
limited partnership units 1,026,809
Redemption of limited partnership units < 129,529>
Distribution to limited partners < 244,228>
Contributions received from general partners --
Net increase <decrease> in cash 177,463
Cash at the beginning of the year 108,554
Cash at the end of the quarter 286,017
</TABLE>
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Cash Flows
Cash flows from operating activities:
<TABLE>
<CAPTION>
YEAR TO DATE
Three Months Ended
March 31, 1996
------------------
<S> <C>
Net Income <Loss> $ 211,137
Adjustments to reconcile net gain
<loss> to net cash provided by
operating activities:
Net unrealized gain <loss> on open contracts < 90,711>
(Increase) decrease in operating assets:
U. S. Treasury obligation < 100,060>
Investments in commodities fund 243,814
Unrealized gain <loss> on open futures and
options contracts 225,682
Market Value of open option contracts < 55,535>
Other Assets 1,527
Increase (decrease) in operating liabilities:
Accrued management fees < 797>
Accrued incentive fees < 63,663>
Other accrued expenses < 8,984>
Amounts received for future subscriptions --
Redemptions payable 191,011
Total Adjustments 342,284
Net Cash from <used in> operating activities 553,421
Cash Flows from <used in> Financing Activities:
Net proceeds from sale of limited partnership --
units
Redemption of limited partnership units < 274,937>
Distribution to limited partners < 288,507>
Contributions received from general partners --
Net increase <decrease> in cash < 10,023>
Cash at the beginning of the year 15,538
Cash at the end of the quarter 5,515
</TABLE>
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Notes to Financial Statements
March 31, 1997
(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 ($100 net of
commission.) 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 4% 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 March 31, 1997, a total of 48,838.1504 units have been
sold, 1,861.9400 have been distributed in lieu of a cash
distribution, and 26,640.6487 units have been redeemed, leaving an
outstanding balance at March 31, 1997, of 24,059.4417 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 three months
ended March 31, 1997, management fees totalled $46,918 and
incentive fees totalled $0.
(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 1997, 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 three month period were $187,623. 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 three month period amounted to $59,498.
(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 16, 1997, the General Partner declared a distribution to
the limited partners equal to the difference between the December
31, 1996, net asset value per unit and $210 per unit. This
distribution, totaling $244,228 in cash and 1,861.94 in units,
resulted in each unit holder having a net asset value of $210 per
unit on January 1, 1997.
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.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
CERES FUND, L.P.
(A Tennessee Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the Quarter Ended March 31, 1997.
RESULTS OF OPERATIONS
Three Months Ending March 31, 1997
Trading and a cash distribution as well as issuance of units
in lieu of a cash distribution in January 1997 resulted in a
decrease in net asset value of approximately 13.1% resulting in net
increase (including fees and expenses) of $72,641 principally in
grains.
Trading in February 1997 resulted in a decrease in net asset
value of approximately 2.6% resulting in net losses (including fees
and expenses) of $131,991, principally in grains.
Trading in March 1997 resulted in a decrease in net asset
value of approximately .1% resulting in net losses (including fees
and expenses) of $55,091 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.
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, 1997 through March 31, 1997, 4,895.7127
additional Units were sold, 1,861.9400 Units were issued in
lieu of a cash distribution, and 636.8479 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
January 31, 1997 - 20,509.3503.
(2) Units of Limited Partnership interest outstanding at
February 28, 1997 - 22,065.3020.
(3) Units of Limited Partnership interest outstanding at
March 31, 1997 - 24,059.4417.
E. Issuance of Limited Partnership Units for cash in the
following amounts and on the following dates:
<TABLE>
<CAPTION>
Dates Units Amount
----- ----- ------
<S> <C> <C>
January 1, 1997 708.7734 $ 148,842
February 1, 1997 1,555.9517 331,731
March 1, 1997 2,630.9876 546,236
</TABLE>
F. Redemption of Limited Partnership Units for cash in the
following amounts and on the following dates:
<TABLE>
<CAPTION>
Dates Units Amount
----- ----- ------
<S> <C> <C>
March 31, 1997 636.8479 $129,529
</TABLE>
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: May 15, 1997
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
<LEGEND>
This schedule contains summary financial information extracted from the
Ceres Fund, L.P. Financial Statements for the quarter ended March 31, 1997 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000869711
<NAME> CERES FUND, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 286,017
<SECURITIES> 5,435,272
<RECEIVABLES> 8,813
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,730,122
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,730,122
<CURRENT-LIABILITIES> 414,422
<BONDS> 0
0
0
<COMMON> 5,315,700
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,730,122
<SALES> 95,744
<TOTAL-REVENUES> 155,272
<CGS> 0
<TOTAL-COSTS> 269,713
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (114,441)
<EPS-PRIMARY> (4.96)
<EPS-DILUTED> 0
</TABLE>
