NOTES TO FINANCIAL STATEMENTS
November 30, 2008 (Unaudited)
In the ordinary course of business, the Funds enter into contracts that contain a variety of indemnifications. The Funds’
maximum exposure under these arrangements is immaterial. The Funds expect the risk of loss to be remote pursuant to the
10. Recent Accounting Pronouncements
In March 2008, FASB issued Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS
161”), an amendment to FASB Statement No. 133. FAS 161 is intended to improve financial reporting for derivative instruments
by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how
derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position.
FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.
Management has evaluated the implications of FAS 161 and the adoption of FAS 161 will not have a material impact on the
amounts reported in the Funds’ financial statements.
11. Regulatory Matters
On October 11, 2006, the Adviser was notified that the Pacific Regional Office of the SEC was conducting an examination
concerning marketing budget arrangements with entities that provide administrative services to the Trust. NCC and the Adviser
cooperated fully with the SEC in that examination. In connection with the SEC examination, the Board of Trustees of the Trust
established a committee comprising independent members of the Board of Trustees that (a) monitored the matter, (b) reviewed
pertinent documents, (c) met with its special counsel, and (d) met with the Staff of the SEC and representatives of the Adviser.
As recommended by the committee, the Trust and Adviser entered into an agreement under which the Adviser made a one-time
payment to the Trust. The payment is reflected as “Net Increase from Payment by Affiliate” in the S