Al Oula Geojit
Al Oula Geojit Al 1 Johar Saudi Equity Sharia Committee Standards Compliant 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 Al Johar Saudi Equity Sharia Committee Standards Compliant 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
-.L) ‘ralal Abu-Ghazaleh & Co.
TAGIAuditors
Global Company for Auditing and Accounting
L&1j L
Certified Public Accountants License No.8 1 -
Al
_>
-
The Unitholdcrs of Al Oula Geojit Al Johar Saudi Equity Sharia Committee Standards Compliant 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 statcnienl of financial position of Al OuLa Geojit Al Johar Saudi Equity Sharia Committee Standards Compliant Fund (the Fund”) managed by Al Oula Geojit Capital Company (the Fund Manager”) as of 30 June 201 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 Manager 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 hnancial 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 of an opinion on the financial statements, therefore, we do not express such opinion.
Conclusion: Based on our review, we arc not aware of any material modifications that should be made to the accompanying interim financial statements in order for them to he in conformity with accounting standards generally accepted in the Kingdom of’ Saudi Arabia.
For Talal Abu-Ghazaleh & Co.
Waleed A. Bamarouf Certified Public Accountant License No. 408 25 Shawal 1436 H. 10 August 2015 G.
Olaya Main St. Beside Ministry of Interior, Tel.: +96611 4642936 Fax: +966 11 465 9915 -
P.O.Box: 9767, Riyadh 11423 Saudi Arabia
-
tagi.com [email protected]
i..ait :
‘to L.Z$ -‘ £
Lil Dvjy
,
Al Ol (;eojit
—
Al .Johar SauW
l’quiIy
Sharia Committee Standards Compliant 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
Investments held for trading Advance against purchase of investment Other current assets Total Assets
(6)
2014 SR.
22,708,352
1.544,760
8,426,085
1 ,486,734 68,572 4,250 3.104.316
2,869 31,137,306
Liabilities Accrued expenses and other liabilities Total Liabilities Net Assets Attributable to Unitholders
SR.
2015
31,045,208
28,924 28,924 3,075,392
3,223,082 9.63
3 1 8,883 9.64
92,098 92,098 —
Exhibit D
Units in issue (numbers) Net assets attributable to each unit (SR)
(7)
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-7-
______________________ ___________ ___________ ___________ ___________ ___
Al Oula (eojit Al ,Johar Saudi Equity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Income For the Six Months Period Ended 30 June 2015 (Unaudited) —
Exhibit B
Note
Income Realized (loss) on disposal of investments held for trading Unrealized gain / (loss) on investments held for trading Dividend income Total (loss) for the period Expenses Management and administration fees Other expenses Total expenses for the period Net (loss) for the period Exhibit D
(8)
—
For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June 2014
(674,878) 286,653 29,303 (358,922)
(18,971) (31,216) 6,641 (43,546)
(115,067) (255) (1 15,322) (474,244)
(28,913) (160) (29,073) (72,619)
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
—-5—
SR.
Al ()ula (eojit Al .Johar Saudi Fquity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Cash Flow For the Six Months Period Ended 30 June 2015 (Unaudited) —
Exhibit C For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June 2014 SR.
Cash Flow From Operating Activities Net (loss) for the period
(474,244)
(72,619)
Adjustment for: Unrealized gain / (loss) on investments held for trading
(286,653)
31,216
(6,920,391)
(1.517,950) (68,572) (4,250) 28,924
Changes In Operating Assets And Liabilities Investments held for trading Advance against purchases of investment Other current assets AccrLled expenses and other liabilities
6,090 51,415 (7,623,783)
Net cash (used in) operating activities Cash Flow From Financing Activities Proceeds from issuance 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 —
29,924,024 29,924,024 22,300,241 408,111 22,708,352
(1,603,251) 3,148,011 3,148,011 1,544,760 --
=
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-4-
1,544,760
Al Oula (;eoiit Al Joliir Sa udi Equity Sharia Committee Standards Compliant Fund 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 Ended 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 Net assets attributable to the unitholders at end of the period
—
Exhibit A
—
Exhibit D For the period 1 January to 30 June 2015 SR. 1,595,428 (474,244)
For the period 20 April to 30 June 2014 SR.
29,924,024 31,045,208
3,148,011 3,075.392
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-5-
(72,619)
Al ()ula (scojit l JohIr Saudi Equity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company —
Kingdom of Saudi Arabia Notes to the Interim Financial Statements For the Six Months Period Ended 30 June 2015 (Unaudited) 1-
The Fund and Its Activities:
Al Oula Geojit Al Johar Saudi Equtiy Sharia Committee Standards Compliant Fund (“the Fund”) is an open—ended mutu& investment fund which is managed through an agreement between al Oula Geojit Capital Company (“the Fund Manager”) and Investors (the Unitholders). The objective of the Fund is to seek capital growth by investing in a diversified portfolio of companies listed on Tadawul (Saudi equity market), over medium to long term period. All income is reinvested in the Fund and is reflected in the unit price. —
The Fund commenced its operation on 20 April 2014 (corresponding to 20 Jumada Al Akhir 1435H.) to meet the above mentioned objectives. 2-
Regulating Authority:
The Fund is governed by the Investment Fund Regulations (“the Regulations”) issued by the Board of the Capital Market Authority (“CMA”) pursuant to its resolution number 1-219-2006 dated 3 Dhul Hajj l427H. corresponding to 24 December 2006 based on the Capital Market Law issued by Royal Decree No. M/30 dated 2 Jurnada Al Akhir 1424 1-1. corresponding 1031 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 attributable to each unit 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 assets 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, except for the measurement of investments held for trading at fair value, 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 Geojit Al ,Joliar Saudi Equity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period Ended 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 fLill set of annual financial statements for the year ended 3 1 December 2014. The interim results of the Fund are not necessarily indicative of results for the full year. The accounting policies set oLit below have been adopted by the Fund and applied consistently throughout the period. a)
Cash and cash equivalents: Cash and cash equivalents comprise of cash in hand and balances held in current accounts with banks and include short—term highly liquid investments with an original maturity of 3 months or less.
b)
Investments held for trading: Investments are classified as “investments held for trading” if they are purchased for the purpose of resale in the short-term. Investments held for trading are initially recorded at cost and subsequent to initial recognition re-measured at fair value and resulting gains or losses are recognized in the statement of income.
c)
Trade date accounting: All investments held for trading are recognized and derecognized on the trade date, i, e. the date that the Fund commits to purchase or sell the assets.
d)
Dividend income: Dividend income is recognized when the right to receive the dividends is established.
e)
Fund management, custodian and fund administration fees: Fund management, custodian and fund administration fees are measured at rates agreed with the Fund Manger. These charges are calcLllated on each valuation day at an annual percentage of the Fund’s net assets value. These expense are charged to the statement of income.
f)
Zakat / Income tax: Zakat / Income tax is the obligation of the unitholders and is not provided for in these financial statements.
g)
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.
h)
Net asset attributable to unitholders: The net asset value per 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.
I)
Financial instruments: Financial asses 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 dc-recognition of financial assets and financial liabilities is taken directly to the statement of income.
-7-
Al Oula Ceojit Al Johar Saudi Equity Sha na Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kin gdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period Ended 30 June 2015 (Unaudited) —
6-
Investments Held for Trading: The investments held for trading comprise of investment in shares of diversified portfol io of companies. The sector-wise composition of investments held for trading is summarized as follows: 2014 2015 SR. SR. Hotel and tourism 67,388 286,585 Petrochemical industries 1,471,690 284,125 Real estate development 2,162,300 273,362 Cement 150,672 708,572 Retail 156,207 Telecommunication and information technology 1,202,688 148,212 Service industries 2,702,679 Others 110,768 187,571 Total Exhibit A 8,426,085 1,486,734 —
As at 30 June 2015 cost of the above mentioned investments held for trading amounted to SR.8,l39,432 (30 June 2014 SR.1,5 17,950). 7-
Unit Transactions: The transactions in units for the period are sLimniarized as follows: 2015 Number 184,308 3,038,774 3,223,082
Unit at beginning of the period Units issued during the period Total Exhibit A —
2014 Number 318,883 318,883
8-
Management Fee, Custodian and Fund Administration Fees and Sundry Expenses: The Fund Manager charges to the Fund on each Valuation Day, management fee at a rate of 1.5% per annum 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.
9-
Transactions and Balances With Related Parties: Related parties of the Fund include unitholders, 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
Nature of transactions
Transaction amounts
For the period
For the period 20 April
ended3OJiine20l5
to3OJune2Ol4
SR.
SR.
Fund management and
Al Oula Geojit Capital Company (Fund Manager)
administration fee
Jamal Johar Mohammad Al-Johar
Custody fees Proceeds from issue of units Proceeds from issue of units
60,389 4,530
6,933 520
1,000,000 29,924,024
The above transactions resulted in the following balance due to related party:
Al Oula Geojit Capital Company (Fund Manager) -8-
2015 SR. 57,748
2014 SR. 7,453
Al Oula (cojit
—
\.l Johar Saudi lquity
Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period Ended 30 June 2015 (Unaudited) 10-
Financial Risk Management:
The Fund maintains position in financial instrument as dictated by its investment policy. All investments are Theld for trading” investments. 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. Egui’ Price Risk:
Equity Irice risk is the risk that the fair value of equity investments decreases as a result of changes in the levels of equity indices and the value of individual stocks. The Fund is exposed to equity price risk arising from its investments in shares. The Fund Manger endeavors to minimize the risk through diversification across various sectors of the Saudi stock markets. Further, the Fund Manager has established risk guidelines to manage its equity prices risk. 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. 11-
Fair Values of Financial Instruments: Fair value is the amount for which an asset coLild he 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 bank balance and investments held for trading and its financial liabilities comprise of expenses payable. Investment held for trading are carried at fair values. The fair values of other financial instruments are not materially different from their carrying values. 12-
Last Valuation Day: The last valuation day of the period was 30 June 2015.
13-
Approval of the Interim Financial Statements:
These interim financial statements were approved by the Fund Board on 25 Shawal 1436H. corresponding to 10 August 2015G.
-9-
Auditors’ Limited Review Report and Interim Financial Statements for the Six Months Period Ended 30 June 2015 (Unaudited)
Al Oula Geojit Al Johar Saudi Equity Sharia Committee Standards Compliant 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
-.L) ‘ralal Abu-Ghazaleh & Co.
TAGIAuditors
Global Company for Auditing and Accounting
L&1j L
Certified Public Accountants License No.8 1 -
Al
_>
-
The Unitholdcrs of Al Oula Geojit Al Johar Saudi Equity Sharia Committee Standards Compliant 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 statcnienl of financial position of Al OuLa Geojit Al Johar Saudi Equity Sharia Committee Standards Compliant Fund (the Fund”) managed by Al Oula Geojit Capital Company (the Fund Manager”) as of 30 June 201 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 Manager 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 hnancial 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 of an opinion on the financial statements, therefore, we do not express such opinion.
Conclusion: Based on our review, we arc not aware of any material modifications that should be made to the accompanying interim financial statements in order for them to he in conformity with accounting standards generally accepted in the Kingdom of’ Saudi Arabia.
For Talal Abu-Ghazaleh & Co.
Waleed A. Bamarouf Certified Public Accountant License No. 408 25 Shawal 1436 H. 10 August 2015 G.
Olaya Main St. Beside Ministry of Interior, Tel.: +96611 4642936 Fax: +966 11 465 9915 -
P.O.Box: 9767, Riyadh 11423 Saudi Arabia
-
tagi.com [email protected]
i..ait :
‘to L.Z$ -‘ £
Lil Dvjy
,
Al Ol (;eojit
—
Al .Johar SauW
l’quiIy
Sharia Committee Standards Compliant 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
Investments held for trading Advance against purchase of investment Other current assets Total Assets
(6)
2014 SR.
22,708,352
1.544,760
8,426,085
1 ,486,734 68,572 4,250 3.104.316
2,869 31,137,306
Liabilities Accrued expenses and other liabilities Total Liabilities Net Assets Attributable to Unitholders
SR.
2015
31,045,208
28,924 28,924 3,075,392
3,223,082 9.63
3 1 8,883 9.64
92,098 92,098 —
Exhibit D
Units in issue (numbers) Net assets attributable to each unit (SR)
(7)
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-7-
______________________ ___________ ___________ ___________ ___________ ___
Al Oula (eojit Al ,Johar Saudi Equity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Income For the Six Months Period Ended 30 June 2015 (Unaudited) —
Exhibit B
Note
Income Realized (loss) on disposal of investments held for trading Unrealized gain / (loss) on investments held for trading Dividend income Total (loss) for the period Expenses Management and administration fees Other expenses Total expenses for the period Net (loss) for the period Exhibit D
(8)
—
For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June 2014
(674,878) 286,653 29,303 (358,922)
(18,971) (31,216) 6,641 (43,546)
(115,067) (255) (1 15,322) (474,244)
(28,913) (160) (29,073) (72,619)
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
—-5—
SR.
Al ()ula (eojit Al .Johar Saudi Fquity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Interim Statement of Cash Flow For the Six Months Period Ended 30 June 2015 (Unaudited) —
Exhibit C For the period 1 January to 30 June 2015 SR.
For the period 20 April to 30 June 2014 SR.
Cash Flow From Operating Activities Net (loss) for the period
(474,244)
(72,619)
Adjustment for: Unrealized gain / (loss) on investments held for trading
(286,653)
31,216
(6,920,391)
(1.517,950) (68,572) (4,250) 28,924
Changes In Operating Assets And Liabilities Investments held for trading Advance against purchases of investment Other current assets AccrLled expenses and other liabilities
6,090 51,415 (7,623,783)
Net cash (used in) operating activities Cash Flow From Financing Activities Proceeds from issuance 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 —
29,924,024 29,924,024 22,300,241 408,111 22,708,352
(1,603,251) 3,148,011 3,148,011 1,544,760 --
=
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-4-
1,544,760
Al Oula (;eoiit Al Joliir Sa udi Equity Sharia Committee Standards Compliant Fund 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 Ended 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 Net assets attributable to the unitholders at end of the period
—
Exhibit A
—
Exhibit D For the period 1 January to 30 June 2015 SR. 1,595,428 (474,244)
For the period 20 April to 30 June 2014 SR.
29,924,024 31,045,208
3,148,011 3,075.392
The accompanying notes from (1) to (13) constitute an integral part of these interim financial statements
-5-
(72,619)
Al ()ula (scojit l JohIr Saudi Equity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company —
Kingdom of Saudi Arabia Notes to the Interim Financial Statements For the Six Months Period Ended 30 June 2015 (Unaudited) 1-
The Fund and Its Activities:
Al Oula Geojit Al Johar Saudi Equtiy Sharia Committee Standards Compliant Fund (“the Fund”) is an open—ended mutu& investment fund which is managed through an agreement between al Oula Geojit Capital Company (“the Fund Manager”) and Investors (the Unitholders). The objective of the Fund is to seek capital growth by investing in a diversified portfolio of companies listed on Tadawul (Saudi equity market), over medium to long term period. All income is reinvested in the Fund and is reflected in the unit price. —
The Fund commenced its operation on 20 April 2014 (corresponding to 20 Jumada Al Akhir 1435H.) to meet the above mentioned objectives. 2-
Regulating Authority:
The Fund is governed by the Investment Fund Regulations (“the Regulations”) issued by the Board of the Capital Market Authority (“CMA”) pursuant to its resolution number 1-219-2006 dated 3 Dhul Hajj l427H. corresponding to 24 December 2006 based on the Capital Market Law issued by Royal Decree No. M/30 dated 2 Jurnada Al Akhir 1424 1-1. corresponding 1031 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 attributable to each unit 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 assets 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, except for the measurement of investments held for trading at fair value, 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 Geojit Al ,Joliar Saudi Equity Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period Ended 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 fLill set of annual financial statements for the year ended 3 1 December 2014. The interim results of the Fund are not necessarily indicative of results for the full year. The accounting policies set oLit below have been adopted by the Fund and applied consistently throughout the period. a)
Cash and cash equivalents: Cash and cash equivalents comprise of cash in hand and balances held in current accounts with banks and include short—term highly liquid investments with an original maturity of 3 months or less.
b)
Investments held for trading: Investments are classified as “investments held for trading” if they are purchased for the purpose of resale in the short-term. Investments held for trading are initially recorded at cost and subsequent to initial recognition re-measured at fair value and resulting gains or losses are recognized in the statement of income.
c)
Trade date accounting: All investments held for trading are recognized and derecognized on the trade date, i, e. the date that the Fund commits to purchase or sell the assets.
d)
Dividend income: Dividend income is recognized when the right to receive the dividends is established.
e)
Fund management, custodian and fund administration fees: Fund management, custodian and fund administration fees are measured at rates agreed with the Fund Manger. These charges are calcLllated on each valuation day at an annual percentage of the Fund’s net assets value. These expense are charged to the statement of income.
f)
Zakat / Income tax: Zakat / Income tax is the obligation of the unitholders and is not provided for in these financial statements.
g)
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.
h)
Net asset attributable to unitholders: The net asset value per 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.
I)
Financial instruments: Financial asses 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 dc-recognition of financial assets and financial liabilities is taken directly to the statement of income.
-7-
Al Oula Ceojit Al Johar Saudi Equity Sha na Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kin gdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period Ended 30 June 2015 (Unaudited) —
6-
Investments Held for Trading: The investments held for trading comprise of investment in shares of diversified portfol io of companies. The sector-wise composition of investments held for trading is summarized as follows: 2014 2015 SR. SR. Hotel and tourism 67,388 286,585 Petrochemical industries 1,471,690 284,125 Real estate development 2,162,300 273,362 Cement 150,672 708,572 Retail 156,207 Telecommunication and information technology 1,202,688 148,212 Service industries 2,702,679 Others 110,768 187,571 Total Exhibit A 8,426,085 1,486,734 —
As at 30 June 2015 cost of the above mentioned investments held for trading amounted to SR.8,l39,432 (30 June 2014 SR.1,5 17,950). 7-
Unit Transactions: The transactions in units for the period are sLimniarized as follows: 2015 Number 184,308 3,038,774 3,223,082
Unit at beginning of the period Units issued during the period Total Exhibit A —
2014 Number 318,883 318,883
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Management Fee, Custodian and Fund Administration Fees and Sundry Expenses: The Fund Manager charges to the Fund on each Valuation Day, management fee at a rate of 1.5% per annum 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.
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Transactions and Balances With Related Parties: Related parties of the Fund include unitholders, 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
Nature of transactions
Transaction amounts
For the period
For the period 20 April
ended3OJiine20l5
to3OJune2Ol4
SR.
SR.
Fund management and
Al Oula Geojit Capital Company (Fund Manager)
administration fee
Jamal Johar Mohammad Al-Johar
Custody fees Proceeds from issue of units Proceeds from issue of units
60,389 4,530
6,933 520
1,000,000 29,924,024
The above transactions resulted in the following balance due to related party:
Al Oula Geojit Capital Company (Fund Manager) -8-
2015 SR. 57,748
2014 SR. 7,453
Al Oula (cojit
—
\.l Johar Saudi lquity
Sharia Committee Standards Compliant Fund Managed by Al Oula Geojit Capital Company Kingdom of Saudi Arabia Notes to the Interim Financial Statements for the Six Months Period Ended 30 June 2015 (Unaudited) 10-
Financial Risk Management:
The Fund maintains position in financial instrument as dictated by its investment policy. All investments are Theld for trading” investments. 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. Egui’ Price Risk:
Equity Irice risk is the risk that the fair value of equity investments decreases as a result of changes in the levels of equity indices and the value of individual stocks. The Fund is exposed to equity price risk arising from its investments in shares. The Fund Manger endeavors to minimize the risk through diversification across various sectors of the Saudi stock markets. Further, the Fund Manager has established risk guidelines to manage its equity prices risk. 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. 11-
Fair Values of Financial Instruments: Fair value is the amount for which an asset coLild he 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 bank balance and investments held for trading and its financial liabilities comprise of expenses payable. Investment held for trading are carried at fair values. The fair values of other financial instruments are not materially different from their carrying values. 12-
Last Valuation Day: The last valuation day of the period was 30 June 2015.
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Approval of the Interim Financial Statements:
These interim financial statements were approved by the Fund Board on 25 Shawal 1436H. corresponding to 10 August 2015G.
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