Al Oula Geojit Capital Saudi Riyal Murabaha Fund
Al Oula Geojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Auditors’ Limited Review Report and Interim Financial Statements for the Six Months Period Ended 30 June 2015 (Unaudited)
Al Oula Geojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia —
Index Page
Exhibit
Auditors’ Limited Review Report
1
Interim Statement of Financial Position as of 30 June 2015
2
A
Interim Statement of Income for the Six Months Period Ended 30 June 2015
3
B
Interim Statement of Cash Flow for the Six Months Period Ended 30 June 2015
4
C
Interim Statement of Changes in Net Assets Attributable to Unitholders for the Six Months Period Ended 30 June 2015
5
D
Notes to the Interim Financial Statements for the Six Months Period Ended 30 June 2015
6-9
TaláI Abu-Ghazaleh & Co.
[1TAGImAudjtors çi
GlObal Company for Auditing and Accounting Certified Public Accountants
.3 -
License No.8 1
Al
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S)__.
L>
The Unitholders of Al Oula Geojit Capital Saudi Riyal Murahalia Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia —
Auditors’ Limited Review Report Scope of Review: We have reviewed the accompanying interim statement of financial position of Al Oula Geojit Capital Saudi Riyal Murahaha Fund (the ‘Fund”) managed by Al Oula Geojit Capital Company (the “Fund Manger”) as of 30 June 20 I 5 and the related interim statements of income, cash flow and changes in net assets attributable to unitholders for the six months period ended 30 June 2015. These interim financial statements have been prepared by the Fund Manger and submitted to us along with the entire information requested. —
We conducted our limited review in accordance with the Standards on Review of Interim Financial Reporting set forth by the Saudi Organization for Certified Public Accountants (SOCPA). A limited review consisted principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression ofan opinion on the financial statements, therefore, we do not express such opinion. Conclusion: Based on our review, we are not aware of any material modifications thai should he made to the accompanying interim financial statements in order for them to be in confonnity with accounting standards generally accepted in the Kingdom of Saudi Arabia. For Talal Abu-Gliazalch & Co.
CCI tified Public Accou n (ant
25 Shawal 1436 H. 10 August 2015 G.
-
Olaya Main St. Beside Ministry of Interior, Tel.: +966 11 4642936 Fax: +966 11 465 9915 P.O.Box: 9767, Riyadh 11423 Saudi Arabia
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tagi.com [email protected]
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Al Oula Ceojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Financial Position as of 30 June 2015 (Unaudited) —
Exhibit A Note
Assets Cash and cash equivalents Murabaha placements Other current assets Total Assets Liabilities Accrued expenses and other liabilities Total Liabilities Net Assets Attributable to Unitholders
(6) (7)
—
Exhibit D (8)
Units in issue (numbers) Net assets value per unit (SR.)
2015
3,203,127 9,616,125
3,032,350 2,000,000 3,787 5,036,137
12,819,252
32,743 32,743 5,003,394
34,893 34,893 12,784,359
513,134 9.75
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-2-
2014 SR.
--
1,279,744 9.99_
_______
Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of In come for the Six Months Period 30 June 2015 (Unaudited) Al Oula Ceojit Capital
—
Note
Income Profit on murabaha placements Total income for the period Expenses Management fees Other expenses Total expenses for the period Net (loss) for the period Exhibit D
(9)
—
Exhibit B For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June
1,547 1,547
19,219 19,219
(7,433) (41,532) (48,965) (47,418)
(14,543)
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
—-,-.
2014 SR.
(20,415)
(34,958) (15,739)
Al Oula Ceojit Capital Saudi Riyal Murahaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Cash Flow for the Six Months Period 30 June 2015 (Unaudited) —
Cash Flow From Operating Activities Net (loss) for the period Changes In Operating Assets And Liabilities Murabaha placements Other current assets Accrued expenses and other liabilities Net cash (used in) operating activities Cash Flow From Financing Activities Net proceeds from issuance and redemption of units Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of the period Cash and cash equivalents, end of the period Exhibit A —
Exhibit C For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June 2014 SR.
(47,418)
(15,739)
(999,956) 5,173 (6,085) (1,048,286)
(9,616,125)
1,399,818
12,800,098 12,800,098
1,399,818 351,532 2,680,818
3,203,127
3,032,350
3,203,127
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-4-
34,893 (9,596,971)
_____
Al Oula Ccojit Capital Saudi Riyal Murahaha FUO(l Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Changes In Net Assets Attributable to Unitholders for the Six Months Period 30 June 2015 (Unaudited) —
Net assets attributable to unitholders at beginning of the period Net (loss) for the period Exhibit B —
Changes from unit transactions Proceeds from issuance of units Payment against redemption of units Net change from unit transactions Net assets attributable to unitholders at end of the period
—
Exhibit A
Exhibit D For the period 1 January to 30 June 2015 SR. 3,650,994 (47,418)
3,999,994 (2,600,176) 1,399,818 5,003,394
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-5
For the period
20 April to 30 June 2014 SR. (15,739)
12,800,098 12,800,098 12,784,359
Al Oiila (;cojit Capital Saudi Riyai Murabaha [uiid r’1anaged by Al Oula Ceojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
1-
The Fund and Its Activities: Al Oula Geojit Capital Saudi Riyal Murabaha Fund (“the Fund”) is an open-ended mutual investment fund which is managed through an agreement between Al Oula Geojit Capital Company (“the Fund Manager”) and Investors (the Unit holders). The objective of the Fund is to generate income and liquidity consistent with short-term money market rates and to preserve the value of unit holders’ investment. All income is reinvested in the Fund and is reflected in the unit price. In dealing with the unit holders, the Fund Manger considers the Fund as an independent unit. Accordingly, the Fund Manager prepares separate financial statements for the Fund —
2-
Regulating Authority: The Fund is governed by the Investment Fund Regulations (‘the Regulations”) issued by the Board of the Capital Market ALithority (“CMA”) pursuant to its resolution number 1-219-2006 dated 3 Dhul Hajj 1427H. corresponding to 24 December 2006 based on the Capital Market Law issued by Royal Decree No. M130 dated 2 Jumada Al Akhir 1424 H. corresponding to 31 July 2003.
3-
Subscription / Redemption (Dealing Day & Valuation Day) Subscription / redemption requests will be accepted on all days on which the Tadawul is open. The value of the Fund’s portfolio is determined twice weekly on Monday and Wednesday (each being a “Valuation Day”). The net asset value of the Fund for the purpose of purchase or sale of units is determined by dividing the net value of assets (fair value of fund asset minus fund liabilities) by the total number of outstanding fund units on the relevant valuation day.
4-
Basis of Preparation: a)
Statement of Compliance: These interim financial statements have been prepared in accordance with the requirements of accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (the “SOCPA”).
b)
Basis of Measurement: These interim financial statements have been prepared under the historical cost convention, using accrual basis of accounting and the going concern concept.
c)
Functional and Presentation Currency: These interim financial statements are presented in Saudi Arabian Riyals (SR) which is the functional currency of the Fund.
d)
Use of Estimates and Judgments: In the ordinary course of business, the preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
-6-
Al Oula Ceojit Capital Saudi Riyal Niurabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
5-
Significant Accounting Policies: The accounting policies used in the preparation of these interim financial statements are consistent with those used in the Fund’s annual financial statements for the year ended 31 December 2014 as described in those financial statements. These interim financial statements do not include all the information presented in full set of annual financial statements; therefore, these interim financial statements should be read in conjunction with the full set of annual financial statements for the year ended 31 December 2014. The interim results of the Fund are not necessarily indicative of results for the full year. The accounting policies set out below have been adopted by the Fund and applied consistently throughout the period.
6-
a)
Cash and Cash Equivalents: Cash and cash equivalents includes balances with banks and highly liquid investments with original maturity of 90 day or less.
b)
Murabaha Placements: Murabaha placements are held to maturity investments placed with various banks and are stated at amortized cost value determined on cost plus accrued profit basis.
c)
Revenue recognition: Profit on murabaha placements is recognized on time-proportion basis over the period of the contract based on the principal amounts outstanding and agreed rate of profit.
d)
Fund management, custodian and fund administration fees: Fund management, custodian and fund administration fees are measured at rate agreed with the Fund Manager. These charges are calculated on each valuation day at an annual percentage of the Fund’s net asset value. These expenses are charged to the statement of income.
e)
Zakat / Income Tax: Zakat / Income tax is the obligation of the Unitholders and is not provided for in these interim financial statements.
f)
Subscription and redemption of units: Units subscribed and redeemed are recorded at the net asset value per unit on the valuation day for which the subscription request and redemption application are received.
g)
Net asset value attributable to unitholders: The net asset attributable to each unit disclosed in the balance sheet is calculated by dividing the net assets to the unitholders by the number of units in issue at the period-end.
h)
Financial instruments: Financial assets and liabilities are recognized at the time when the Fund becomes a party to the contractual provision of the instrument. Any gain or loss on de-recognition of financial assets and financial liabilities is taken directly to the Statement in Income.
Cash and Cash Equivalents: The details of this item are as follows: a)
Cash at bank Murabaha placements original maturity 90 days or less —Note (6/b) Total Exhibit A —
b)
2015 SR. 2,032,350 1,000,000 3,032,350
2014 SR. 33 3,203,094 3,203,127
This item represents Murabaha placement in a local commercial bank having maturity date 27 July 2015. -7-
Al Oula Ceojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
7-
Murabaha Placements: The Fund has made short-term placements with local commercial banks with commercial market rates.
Below is the detail of such Murabaha placements with original maturity of 90 days or more: As at 30 June 2015 As at 30 June 2014 Maturity date Amount Counter Party Maturity date Amount Riyal bank Emirates NBD Branch Arab National Bank Bank Muscat international Total Exhibit A
29 September2015
1,000,000 --
02 October 201 5
3,204,588 3,205,422
01 December 2014
3,206,115 9,616,125
1,000,000 --
2,000,000
—
8-
02 October2014 01 December 2014
Unit Transactions: Transactions in units for the period are summarized as follows:
2015 Number 366,797 409,437 (263,100) 513,134
Units at beginning of the period Units issued during the period Units redeemed during the period
Units at end of the period
—
Exhibit A
2014 Number
1,600,000 (320,256) 1,279,744
9-
Management Fee, Custodian and Fund Administration Fee and Sundry Expenses: The Fund Manager charges to the Fund on each Valuation Day, management fee at a rate of 0.5% per annui-n of the Fund’s net assets value. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund including custodian and fund administration fee, audit fee, board compensation and other similar charges. These charges, in total, are not expected to exceed the limit as agreed with the Fund Manager.
10-
Transactions and Balances With Related Parties: Related parties of the Fund include unit holders, the Fund Manager and other funds managed by the Fund manager. All transactions with related parties are carried out based on mutually agreed prices under formal agreement. Related party transactions for the period are as under: Related party
Al Oula Geojit Capital Company (Fund Manager)
Ishbelia Towers Real Estate Fund
Transaction amounts
Nature of transactions
For the period ended 30 June2015
For the period 20 April to 30 June 2014
SR.
SR.
Fund management fee Custody and administration fees Subscription of units Redemption of units Subscription of units Redemption of units
7,433 1,487 --
14,543 2,909 1,000,000
--
3,999,994 (2,600,176)
15,000,000 (3,199,902)
The above transactions resulted in the following balance due to related party: 2015
Al Oula Geojit Capital Company (Fund Manager)
11-
SR. 4,247
2014 SR. 17,452
Financial Risk Management: The Fund maintains position in financial instrument as dictated by its investment policy. The Fund is exposed to the following risks: Credit Risk: Credit risk is a risk one party to a financial instrument may fail to discharge an obligation and cause the other party to incur a financial loss. The Fund is exposed to the credit risk on cash and cash equivalents which are maintained with the financial institutions with good credit rating. Thus the credit risk is not
considered significant.
-8-
AL Oula Ceojit Capital Saudi Riyal Murahaha Fund N’lanaged by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
Murabaha Profit Rate Risk: Murabaha profit rate risk are exposed to fluctuations in the prevailing profit rates on the Fund’s financial position and cash flows. The Fund’s Murabaha placement are based on fixed rates and are not exposed to profit rate fluctuations. Currency Risk: Currency risk is the risk that the value of a financial instrument may fluctuate due to a change in foreign exchange rates. The Fund is not subject to currency risk as all the assets and liabilities of the Fund are in local currency. Liquidity Risk: Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial assets quickly at an amount close to its fair value. The FLind manager manages the liquidity risk by monitoring on a regular basis that sufficient funds are available through managing Murabaha placements to meet any future commitments. At period end the current assets are significantly higher then it current liabilities and thus the Fund does not flice any significant liquidity risk. 12-
Fair Values of Financial Instruments: Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments comprise financial assets and financial liabilities. The Fund’s financial assets comprise of cash and cash equivalents and Murabaha placements; its financial liabilities comprise of expenses payable. The fair values of financial instruments are not materially different from their carrying values.
13-
Approval of the Interim Financial Statements: These interim financial statements were approved by the Fund Board on 25 Shawal l436H. corresponding to 10 August 2015G.
-9--
Al Oula Geojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia —
Index Page
Exhibit
Auditors’ Limited Review Report
1
Interim Statement of Financial Position as of 30 June 2015
2
A
Interim Statement of Income for the Six Months Period Ended 30 June 2015
3
B
Interim Statement of Cash Flow for the Six Months Period Ended 30 June 2015
4
C
Interim Statement of Changes in Net Assets Attributable to Unitholders for the Six Months Period Ended 30 June 2015
5
D
Notes to the Interim Financial Statements for the Six Months Period Ended 30 June 2015
6-9
TaláI Abu-Ghazaleh & Co.
[1TAGImAudjtors çi
GlObal Company for Auditing and Accounting Certified Public Accountants
.3 -
License No.8 1
Al
-
?—
S)__.
L>
The Unitholders of Al Oula Geojit Capital Saudi Riyal Murahalia Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia —
Auditors’ Limited Review Report Scope of Review: We have reviewed the accompanying interim statement of financial position of Al Oula Geojit Capital Saudi Riyal Murahaha Fund (the ‘Fund”) managed by Al Oula Geojit Capital Company (the “Fund Manger”) as of 30 June 20 I 5 and the related interim statements of income, cash flow and changes in net assets attributable to unitholders for the six months period ended 30 June 2015. These interim financial statements have been prepared by the Fund Manger and submitted to us along with the entire information requested. —
We conducted our limited review in accordance with the Standards on Review of Interim Financial Reporting set forth by the Saudi Organization for Certified Public Accountants (SOCPA). A limited review consisted principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression ofan opinion on the financial statements, therefore, we do not express such opinion. Conclusion: Based on our review, we are not aware of any material modifications thai should he made to the accompanying interim financial statements in order for them to be in confonnity with accounting standards generally accepted in the Kingdom of Saudi Arabia. For Talal Abu-Gliazalch & Co.
CCI tified Public Accou n (ant
25 Shawal 1436 H. 10 August 2015 G.
-
Olaya Main St. Beside Ministry of Interior, Tel.: +966 11 4642936 Fax: +966 11 465 9915 P.O.Box: 9767, Riyadh 11423 Saudi Arabia
aii
-
tagi.com [email protected]
-
iis t.ais
t
: ô
is a.i s 4
-
t
LI °YtV
:
Al Oula Ceojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Financial Position as of 30 June 2015 (Unaudited) —
Exhibit A Note
Assets Cash and cash equivalents Murabaha placements Other current assets Total Assets Liabilities Accrued expenses and other liabilities Total Liabilities Net Assets Attributable to Unitholders
(6) (7)
—
Exhibit D (8)
Units in issue (numbers) Net assets value per unit (SR.)
2015
3,203,127 9,616,125
3,032,350 2,000,000 3,787 5,036,137
12,819,252
32,743 32,743 5,003,394
34,893 34,893 12,784,359
513,134 9.75
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-2-
2014 SR.
--
1,279,744 9.99_
_______
Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of In come for the Six Months Period 30 June 2015 (Unaudited) Al Oula Ceojit Capital
—
Note
Income Profit on murabaha placements Total income for the period Expenses Management fees Other expenses Total expenses for the period Net (loss) for the period Exhibit D
(9)
—
Exhibit B For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June
1,547 1,547
19,219 19,219
(7,433) (41,532) (48,965) (47,418)
(14,543)
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
—-,-.
2014 SR.
(20,415)
(34,958) (15,739)
Al Oula Ceojit Capital Saudi Riyal Murahaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Cash Flow for the Six Months Period 30 June 2015 (Unaudited) —
Cash Flow From Operating Activities Net (loss) for the period Changes In Operating Assets And Liabilities Murabaha placements Other current assets Accrued expenses and other liabilities Net cash (used in) operating activities Cash Flow From Financing Activities Net proceeds from issuance and redemption of units Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of the period Cash and cash equivalents, end of the period Exhibit A —
Exhibit C For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June 2014 SR.
(47,418)
(15,739)
(999,956) 5,173 (6,085) (1,048,286)
(9,616,125)
1,399,818
12,800,098 12,800,098
1,399,818 351,532 2,680,818
3,203,127
3,032,350
3,203,127
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-4-
34,893 (9,596,971)
_____
Al Oula Ccojit Capital Saudi Riyal Murahaha FUO(l Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Changes In Net Assets Attributable to Unitholders for the Six Months Period 30 June 2015 (Unaudited) —
Net assets attributable to unitholders at beginning of the period Net (loss) for the period Exhibit B —
Changes from unit transactions Proceeds from issuance of units Payment against redemption of units Net change from unit transactions Net assets attributable to unitholders at end of the period
—
Exhibit A
Exhibit D For the period 1 January to 30 June 2015 SR. 3,650,994 (47,418)
3,999,994 (2,600,176) 1,399,818 5,003,394
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-5
For the period
20 April to 30 June 2014 SR. (15,739)
12,800,098 12,800,098 12,784,359
Al Oiila (;cojit Capital Saudi Riyai Murabaha [uiid r’1anaged by Al Oula Ceojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
1-
The Fund and Its Activities: Al Oula Geojit Capital Saudi Riyal Murabaha Fund (“the Fund”) is an open-ended mutual investment fund which is managed through an agreement between Al Oula Geojit Capital Company (“the Fund Manager”) and Investors (the Unit holders). The objective of the Fund is to generate income and liquidity consistent with short-term money market rates and to preserve the value of unit holders’ investment. All income is reinvested in the Fund and is reflected in the unit price. In dealing with the unit holders, the Fund Manger considers the Fund as an independent unit. Accordingly, the Fund Manager prepares separate financial statements for the Fund —
2-
Regulating Authority: The Fund is governed by the Investment Fund Regulations (‘the Regulations”) issued by the Board of the Capital Market ALithority (“CMA”) pursuant to its resolution number 1-219-2006 dated 3 Dhul Hajj 1427H. corresponding to 24 December 2006 based on the Capital Market Law issued by Royal Decree No. M130 dated 2 Jumada Al Akhir 1424 H. corresponding to 31 July 2003.
3-
Subscription / Redemption (Dealing Day & Valuation Day) Subscription / redemption requests will be accepted on all days on which the Tadawul is open. The value of the Fund’s portfolio is determined twice weekly on Monday and Wednesday (each being a “Valuation Day”). The net asset value of the Fund for the purpose of purchase or sale of units is determined by dividing the net value of assets (fair value of fund asset minus fund liabilities) by the total number of outstanding fund units on the relevant valuation day.
4-
Basis of Preparation: a)
Statement of Compliance: These interim financial statements have been prepared in accordance with the requirements of accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (the “SOCPA”).
b)
Basis of Measurement: These interim financial statements have been prepared under the historical cost convention, using accrual basis of accounting and the going concern concept.
c)
Functional and Presentation Currency: These interim financial statements are presented in Saudi Arabian Riyals (SR) which is the functional currency of the Fund.
d)
Use of Estimates and Judgments: In the ordinary course of business, the preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
-6-
Al Oula Ceojit Capital Saudi Riyal Niurabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
5-
Significant Accounting Policies: The accounting policies used in the preparation of these interim financial statements are consistent with those used in the Fund’s annual financial statements for the year ended 31 December 2014 as described in those financial statements. These interim financial statements do not include all the information presented in full set of annual financial statements; therefore, these interim financial statements should be read in conjunction with the full set of annual financial statements for the year ended 31 December 2014. The interim results of the Fund are not necessarily indicative of results for the full year. The accounting policies set out below have been adopted by the Fund and applied consistently throughout the period.
6-
a)
Cash and Cash Equivalents: Cash and cash equivalents includes balances with banks and highly liquid investments with original maturity of 90 day or less.
b)
Murabaha Placements: Murabaha placements are held to maturity investments placed with various banks and are stated at amortized cost value determined on cost plus accrued profit basis.
c)
Revenue recognition: Profit on murabaha placements is recognized on time-proportion basis over the period of the contract based on the principal amounts outstanding and agreed rate of profit.
d)
Fund management, custodian and fund administration fees: Fund management, custodian and fund administration fees are measured at rate agreed with the Fund Manager. These charges are calculated on each valuation day at an annual percentage of the Fund’s net asset value. These expenses are charged to the statement of income.
e)
Zakat / Income Tax: Zakat / Income tax is the obligation of the Unitholders and is not provided for in these interim financial statements.
f)
Subscription and redemption of units: Units subscribed and redeemed are recorded at the net asset value per unit on the valuation day for which the subscription request and redemption application are received.
g)
Net asset value attributable to unitholders: The net asset attributable to each unit disclosed in the balance sheet is calculated by dividing the net assets to the unitholders by the number of units in issue at the period-end.
h)
Financial instruments: Financial assets and liabilities are recognized at the time when the Fund becomes a party to the contractual provision of the instrument. Any gain or loss on de-recognition of financial assets and financial liabilities is taken directly to the Statement in Income.
Cash and Cash Equivalents: The details of this item are as follows: a)
Cash at bank Murabaha placements original maturity 90 days or less —Note (6/b) Total Exhibit A —
b)
2015 SR. 2,032,350 1,000,000 3,032,350
2014 SR. 33 3,203,094 3,203,127
This item represents Murabaha placement in a local commercial bank having maturity date 27 July 2015. -7-
Al Oula Ceojit Capital Saudi Riyal Murabaha Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
7-
Murabaha Placements: The Fund has made short-term placements with local commercial banks with commercial market rates.
Below is the detail of such Murabaha placements with original maturity of 90 days or more: As at 30 June 2015 As at 30 June 2014 Maturity date Amount Counter Party Maturity date Amount Riyal bank Emirates NBD Branch Arab National Bank Bank Muscat international Total Exhibit A
29 September2015
1,000,000 --
02 October 201 5
3,204,588 3,205,422
01 December 2014
3,206,115 9,616,125
1,000,000 --
2,000,000
—
8-
02 October2014 01 December 2014
Unit Transactions: Transactions in units for the period are summarized as follows:
2015 Number 366,797 409,437 (263,100) 513,134
Units at beginning of the period Units issued during the period Units redeemed during the period
Units at end of the period
—
Exhibit A
2014 Number
1,600,000 (320,256) 1,279,744
9-
Management Fee, Custodian and Fund Administration Fee and Sundry Expenses: The Fund Manager charges to the Fund on each Valuation Day, management fee at a rate of 0.5% per annui-n of the Fund’s net assets value. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund including custodian and fund administration fee, audit fee, board compensation and other similar charges. These charges, in total, are not expected to exceed the limit as agreed with the Fund Manager.
10-
Transactions and Balances With Related Parties: Related parties of the Fund include unit holders, the Fund Manager and other funds managed by the Fund manager. All transactions with related parties are carried out based on mutually agreed prices under formal agreement. Related party transactions for the period are as under: Related party
Al Oula Geojit Capital Company (Fund Manager)
Ishbelia Towers Real Estate Fund
Transaction amounts
Nature of transactions
For the period ended 30 June2015
For the period 20 April to 30 June 2014
SR.
SR.
Fund management fee Custody and administration fees Subscription of units Redemption of units Subscription of units Redemption of units
7,433 1,487 --
14,543 2,909 1,000,000
--
3,999,994 (2,600,176)
15,000,000 (3,199,902)
The above transactions resulted in the following balance due to related party: 2015
Al Oula Geojit Capital Company (Fund Manager)
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SR. 4,247
2014 SR. 17,452
Financial Risk Management: The Fund maintains position in financial instrument as dictated by its investment policy. The Fund is exposed to the following risks: Credit Risk: Credit risk is a risk one party to a financial instrument may fail to discharge an obligation and cause the other party to incur a financial loss. The Fund is exposed to the credit risk on cash and cash equivalents which are maintained with the financial institutions with good credit rating. Thus the credit risk is not
considered significant.
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AL Oula Ceojit Capital Saudi Riyal Murahaha Fund N’lanaged by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period 30 June 2015 (Unaudited) —
Murabaha Profit Rate Risk: Murabaha profit rate risk are exposed to fluctuations in the prevailing profit rates on the Fund’s financial position and cash flows. The Fund’s Murabaha placement are based on fixed rates and are not exposed to profit rate fluctuations. Currency Risk: Currency risk is the risk that the value of a financial instrument may fluctuate due to a change in foreign exchange rates. The Fund is not subject to currency risk as all the assets and liabilities of the Fund are in local currency. Liquidity Risk: Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial assets quickly at an amount close to its fair value. The FLind manager manages the liquidity risk by monitoring on a regular basis that sufficient funds are available through managing Murabaha placements to meet any future commitments. At period end the current assets are significantly higher then it current liabilities and thus the Fund does not flice any significant liquidity risk. 12-
Fair Values of Financial Instruments: Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments comprise financial assets and financial liabilities. The Fund’s financial assets comprise of cash and cash equivalents and Murabaha placements; its financial liabilities comprise of expenses payable. The fair values of financial instruments are not materially different from their carrying values.
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Approval of the Interim Financial Statements: These interim financial statements were approved by the Fund Board on 25 Shawal l436H. corresponding to 10 August 2015G.
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