Other Receivables Petroleum Fund Annual Report 2015

Notes to the financial statements for the year ended 31 December 2015 38

9. Financial assets valued through profit or loss continued

A summary of securities is as follows: As at 31122015 USD As at 31122014 USD Designated as at fair value through profit or loss Fair Value of net assets Fair Value of net assets Fixed interest securities United States treasury bill 19,962,597 - - - European treasury bill - - 11,190,953 - United States treasury notes 8,049,248,771 50 8,311,880,935 50 Australian government bonds 177,167,232 1 163,501,748 1 Japanese government bonds 154,358,289 1 147,261,709 1 United Kingdom government bonds 155,324,504 1 193,285,097 1 European government bonds 487,196,026 3 443,574,441 3 Other government bonds 608,651,281 4 616,124,795 4 Total fixed interest securities 9,651,908,700 60 9,886,819,678 60 Equity securities United States equities 3,784,991,393 23 3,856,201,783 23 Australian equities 162,983,537 1 176,209,987 1 Japanese equities 579,451,558 4 531,978,919 3 United Kingdom equities 485,484,977 3 532,166,374 3 European equities 734,478,624 5 740,570,166 5 Equities from other countries 676,772,309 4 742,812,061 5 Total equity securities 6,424,162,398 40 6,579,939,290 40 Held for trading Derivatives Foreign currency forwards 231,356 - 293,358 - Equity options - - 18,075 - 231,356 - 275,283 - Total securities 16,076,302,454 16,466,483,685 In the table above, European equities represents all equities denoted in Euros. The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.  Level 1 fair value measurements are those derived from quoted prices unadjusted in active markets for identical assets or liabilities. The Petroleum Fund does not adjust the quoted prices for these instruments.  Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly i.e. as prices or indirectly i.e. derived from prices. As level 2 investments include positions that are not traded in active markets andor subject to transfer restrictions, valuations may be adjusted to reflect illiquidity andor non-transferability which are generally based on available market information.  Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data unobservable inputs. As at 31122015 USD Financial assets Level 1 Level 2 Level 3 Total Financial Instruments designated at fair value through profit or loss Derivatives - 231,356 - 231,356 Equity securities 6,424,162,398 - - 6,424,162,398 Fixed interest securities 9,651,908,700 - - 9,651,908,700 Total 16,076,071,098 231,356 - 16,076,302,454 Notes to the financial statements for the year ended 31 December 2015 39

9. Financial assets valued through profit or loss continued

As at 31122014 USD Financial assets Level 1 Level 2 Level 3 Total Financial Instruments designated at fair value through profit or loss Derivatives 18,075 - - 18,075 Equity securities 6,579,939,290 - - 6,579,939,290 Fixed interest securities 9,886,819,678 - - 9,886,819,678 Total 16,466,777,043 - - 16,466,777,043 As at 31122014 USD Financial liabilities Level 1 Level 2 Level 3 Total Financial Instruments designated at fair value through profit or loss Derivatives - 293,358 - 293,358 Total - 293,358 - 293,358 There were no transfers between levels for the year ended 31 December 2015, 2014: Nil. There were no movements in all levels of instruments for the year ended 31 December 2015, 2014: Nil. A detailed schedule of financial assets at fair value through profit or loss is at Note 18.

10. Derivative contracts

Typically, derivative contracts serve as components of the Fund’s investment strategy and are utilized primarily to structure and hedge investments, to enhance performance and reduce risk to the Fund the Fund does not designate any derivative as a hedging instrument for hedge accounting purposes. The derivative contracts that the Fund holds include: futures and forward currency contracts. The Fund uses derivative financial instruments to economically hedge its risks associated with foreign currency fluctuations. Additionally, derivative financial instruments may also be used for trading purposes where the investment manager believes this would be more efficient than investing directly in the underlying financial instruments. Derivatives often reflect, at their inception, only a mutual exchange of promises with little or no transfer of tangible consideration. However, these instruments frequently involve a high degree of leverage and are very volatile. A relatively small movement in the underlying of a derivative contract may have a significant impact on the profit or loss of the Fund. Over the counter OTC derivatives may expose the Fund to the risks associated with the absence of an exchange market on which to close out an open position. The investment manager is instructed to closely monitor the Fund’s exposure under derivative contracts as part of the overall management of the Fund’s market risk see also Note 12. During the year ended 31 December 2015, the Fund had positions in the following types of derivatives: Forwards and futures Forward and futures contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. Forwards are customized contracts transacted in the OTC market. Futures contracts are transacted in standardized amounts on regulated exchanges and are subject to daily cash margin requirements. The main differences in the risk associated with forward and futures contracts are credit risk and liquidity risk. The Fund has credit exposure to the counterparties of forward contracts. The credit risk related to future contracts is considered minimal because the exchange ensures that these contracts are always honoured. Forward contracts are settled gross and, therefore, considered to bear a higher liquidity risk than the future contracts which are settled on a net basis. Both types of contracts result in market risk exposure.