Al Yusr GCC Equity Fund - Alawwal Invest
Al Yusr GCC Equity Fund (Managed by Alawwal Invest Company, previously known as Saudi Hollandi Capital Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2017
Al Yusr GCC Equity Fund INTERIM BALANCE SHEET As at 30 June 2017
Note
ASSETS Bank balance Trading investments Dividend receivable Receivables and advances
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
1,005,624 4,557,124 9,400 ───────── 5,572,148
937,862 4,621,904 825 ───────── 5,560,591
2,471,352 5,115,110 5,527 ───────── 7,591,989
33,414 ───────── 5,538,734 ═════════
64,316 ───────── 5,496,275 ═════════
32,000 ───────── 7,559,989 ═════════
Units in issue
440,377 ═════════
440,377 ═════════
631,337 ═════════
Per unit value
12.5773 ═════════
12.4808 ═════════
11.9746 ═════════
LIABILITY Accrued expenses NET ASSETS
4
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 2
Al Yusr GCC Equity Fund INTERIM STATEMENT OF OPERATIONS For the six-month period ended 30 June 2017
Note INVESTMENT INCOME (LOSS) Trading income (loss), net
2017 (Unaudited) SR
2016 (Unaudited) SR
5
126,314 ─────────
(32,340) ─────────
EXPENSES Management fees Other expenses
6
NET INCOME (LOSS) FROM OPERATIONS
8
(52,986) (30,869) ───────── (83,855) ───────── 42,459 ═════════
(74,748) (35,484) ───────── (110,232) ───────── (142,572) ═════════
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 3
Al Yusr GCC Equity Fund INTERIM STATEMENT OF CASH FLOWS For the six-month period ended 30 June 2017 2017 (Unaudited) SR OPERATING ACTIVITIES Net income (loss) from operations Adjustment for: Unrealized gains on trading investments Changes in operating assets and liability: Trading investments Dividend receivable Accrued expenses Receivables and advances Net cash from operating activities FINANCING ACTIVITIES Proceeds from sale of units Value of units redeemed Net cash used in financing activities INCREASE IN BANK BALANCE Bank balance at the beginning of the period BANK BALANCE AT THE END OF THE PERIOD
42,459
2016 (Unaudited) SR (142,572)
(1,441,068) ───────── (1,398,609)
(582,105) ───────── (724,677)
1,505,848 (9,400) (30,902) 825 ───────── 67,762 ─────────
2,117,945 (5,527) 32,000 88,420 ───────── 1,508,161 ─────────
───────── ───────── 67,762
1,018,500 (1,592,000) ───────── (573,500) ───────── 934,661
937,862 ───────── 1,005,624 ═════════
1,536,691 ───────── 2,471,352 ═════════
139,813 ═════════
160,016 ═════════
OPERATIONAL CASH FLOWS FROM DIVIDEND INCOME Dividend income received
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 4
Al Yusr GCC Equity Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS For the six-month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income (loss) from operations CHANGES FROM UNIT TRANSACTIONS Proceeds from sale of units Value of units redeemed Net change from unit transactions NET ASSETS AT THE END OF THE PERIOD
2016 (Unaudited) SR
5,496,275 ─────────
8,276,061 ─────────
42,459 ─────────
(142,572) ─────────
───────── ───────── 5,538,734 ═════════
1,018,500 (1,592,000) ───────── (573,500) ───────── 7,559,989 ═════════
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarised as follows: 2017 (Unaudited) Units
2016 (Unaudited) Units
UNITS AT THE BEGINNING OF THE PERIOD
440,377 ─────────
679,351 ─────────
Units sold Units redeemed
───────── ───────── 440,377 ═════════
85,204 (133,218) ───────── (48,014) ───────── 631,337 ═════════
Net decrease in units UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 5
Al Yusr GCC Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS At 30 June 2017 1
GENERAL
Al Yusr GCC Equity Fund (the “Fund”) is an open-ended fund created by agreement between Alawwal Invest Company (the “Fund Manager”), a subsidiary of Alawwal Bank (the “Bank”) and investors in the Fund (the “Unit Holders”) and is designed for investors seeking long term capital appreciation through investments in equities of publicly traded Sharia compliant companies of Saudi and GCC markets and in short term Morabaha transactions and funds. The fund is governed by the terms and condition of its prospectus dated 1 March 2017. The assets of the Fund are invested in equities of Sharia compliant companies in the Saudi and GCC markets. All income is reinvested in the Fund and is reflected in the unit price. The Fund commenced its operations on 22 Rabi Thani 1428H (corresponding to 9 May 2007). The books and records of the Fund are maintained in Saudi Riyals (SR). 2
REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (“the Regulations”) issued by the CMA on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) and effective from 6 Safar 1438 (corresponding 6 November 2016) by the New Investment Fund Regulations (“Amended Regulations”), published by the Capital Market Authority on 16 Sha’aban 1437H (corresponding to 23 May 2016), detailing requirements for all funds within the Kingdom of Saudi Arabia. The enhanced requirements of Annexure 5(e) of the Amended Regulations are effective from 2017. 3
SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements have been prepared in accordance with the accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). The significant accounting policies used in the preparation of these interim financial statements are consistent with those used and disclosed in the annual financial statements for the year ended 31 December 2016 and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention, modified to include the measurement at fair value of trading securities. Investment valuation Trading investments are valued at market price. Unrealised gains and losses on revaluation and realised gains and losses on disposal of investments are included in the interim statement of operations. Zakat and income tax Zakat and income tax are considered to be the obligation of the Unit Holders and are not provided in the accompanying interim financial statements. Revenue recognition Dividend income is recorded when dividends are declared. Realised gains and losses on investments sold are determined on an average cost basis. Trading income includes all gains and losses from changes in fair value and dividends earned. Expenses Expenses are recognised on an accruals basis. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyal at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations.
6
Al Yusr GCC Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 2017 4
TRADING INVESTMENTS
The composition of the trading investment portfolio on the last valuation date of the period is set out below: Cost SR
Equity investments: 30 June 2017 (Unaudited) Investments in Saudi equity markets Investments in other GCC equity markets
31 December 2016 (Audited) Investments in Saudi equity markets Investments in other GCC equity markets
30 June 2016 (Unaudited) Investments in Saudi equity markets Investments in other GCC equity markets
5
Market value SR
4,094,256 1,259,102 ───────── 5,353,358 ═════════
3,663,956 893,168 ───────── 4,557,124 ═════════
4,162,901 1,358,429 ───────── 5,521,330 ═════════
3,661,418 960,486 ───────── 4,621,904 ═════════
5,361,201 1,363,412 ───────── 6,724,613 ═════════
4,243,587 871,523 ───────── 5,115,110 ═════════
TRADING INCOME (LOSS), NET For the six-month period ended 30 June 2017 2016 (Unaudited) (Unaudited) SR SR
Unrealised gains Dividend income Realized losses
6
1,441,068 149,213 (1,463,967) ───────── 126,314 ═════════
582,105 165,543 (779,988) ───────── (32,340) ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund is managed and administered by the Fund manager. For this service the Fund pays a management fee calculated on every valuation day, at an annual rate of 1.95% of the Fund’s daily net assets. In addition, the Fund manager charges a subscription fee of 1.5% on gross subscriptions to cover administration costs and a redemption fee of 0.5% on redemptions within a month of subscribing, which is reinvested in the Fund. Other expenses paid by the Company on behalf of the Fund are charged to the Fund. In the normal course of business, the Fund places deposits and borrows from or to the Bank at prevailing market rates. The Bank acts as the Fund’s banker and the Fund Manager acts as the custodian to the Fund’s investment. 7
LAST VALUATION DAY
The last valuation day of the period was 30 June 2017 (2016: 30 June 2016). 8
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results. 7
Al Yusr GCC Equity Fund INTERIM BALANCE SHEET As at 30 June 2017
Note
ASSETS Bank balance Trading investments Dividend receivable Receivables and advances
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
1,005,624 4,557,124 9,400 ───────── 5,572,148
937,862 4,621,904 825 ───────── 5,560,591
2,471,352 5,115,110 5,527 ───────── 7,591,989
33,414 ───────── 5,538,734 ═════════
64,316 ───────── 5,496,275 ═════════
32,000 ───────── 7,559,989 ═════════
Units in issue
440,377 ═════════
440,377 ═════════
631,337 ═════════
Per unit value
12.5773 ═════════
12.4808 ═════════
11.9746 ═════════
LIABILITY Accrued expenses NET ASSETS
4
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 2
Al Yusr GCC Equity Fund INTERIM STATEMENT OF OPERATIONS For the six-month period ended 30 June 2017
Note INVESTMENT INCOME (LOSS) Trading income (loss), net
2017 (Unaudited) SR
2016 (Unaudited) SR
5
126,314 ─────────
(32,340) ─────────
EXPENSES Management fees Other expenses
6
NET INCOME (LOSS) FROM OPERATIONS
8
(52,986) (30,869) ───────── (83,855) ───────── 42,459 ═════════
(74,748) (35,484) ───────── (110,232) ───────── (142,572) ═════════
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 3
Al Yusr GCC Equity Fund INTERIM STATEMENT OF CASH FLOWS For the six-month period ended 30 June 2017 2017 (Unaudited) SR OPERATING ACTIVITIES Net income (loss) from operations Adjustment for: Unrealized gains on trading investments Changes in operating assets and liability: Trading investments Dividend receivable Accrued expenses Receivables and advances Net cash from operating activities FINANCING ACTIVITIES Proceeds from sale of units Value of units redeemed Net cash used in financing activities INCREASE IN BANK BALANCE Bank balance at the beginning of the period BANK BALANCE AT THE END OF THE PERIOD
42,459
2016 (Unaudited) SR (142,572)
(1,441,068) ───────── (1,398,609)
(582,105) ───────── (724,677)
1,505,848 (9,400) (30,902) 825 ───────── 67,762 ─────────
2,117,945 (5,527) 32,000 88,420 ───────── 1,508,161 ─────────
───────── ───────── 67,762
1,018,500 (1,592,000) ───────── (573,500) ───────── 934,661
937,862 ───────── 1,005,624 ═════════
1,536,691 ───────── 2,471,352 ═════════
139,813 ═════════
160,016 ═════════
OPERATIONAL CASH FLOWS FROM DIVIDEND INCOME Dividend income received
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 4
Al Yusr GCC Equity Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS For the six-month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income (loss) from operations CHANGES FROM UNIT TRANSACTIONS Proceeds from sale of units Value of units redeemed Net change from unit transactions NET ASSETS AT THE END OF THE PERIOD
2016 (Unaudited) SR
5,496,275 ─────────
8,276,061 ─────────
42,459 ─────────
(142,572) ─────────
───────── ───────── 5,538,734 ═════════
1,018,500 (1,592,000) ───────── (573,500) ───────── 7,559,989 ═════════
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarised as follows: 2017 (Unaudited) Units
2016 (Unaudited) Units
UNITS AT THE BEGINNING OF THE PERIOD
440,377 ─────────
679,351 ─────────
Units sold Units redeemed
───────── ───────── 440,377 ═════════
85,204 (133,218) ───────── (48,014) ───────── 631,337 ═════════
Net decrease in units UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 5
Al Yusr GCC Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS At 30 June 2017 1
GENERAL
Al Yusr GCC Equity Fund (the “Fund”) is an open-ended fund created by agreement between Alawwal Invest Company (the “Fund Manager”), a subsidiary of Alawwal Bank (the “Bank”) and investors in the Fund (the “Unit Holders”) and is designed for investors seeking long term capital appreciation through investments in equities of publicly traded Sharia compliant companies of Saudi and GCC markets and in short term Morabaha transactions and funds. The fund is governed by the terms and condition of its prospectus dated 1 March 2017. The assets of the Fund are invested in equities of Sharia compliant companies in the Saudi and GCC markets. All income is reinvested in the Fund and is reflected in the unit price. The Fund commenced its operations on 22 Rabi Thani 1428H (corresponding to 9 May 2007). The books and records of the Fund are maintained in Saudi Riyals (SR). 2
REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (“the Regulations”) issued by the CMA on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) and effective from 6 Safar 1438 (corresponding 6 November 2016) by the New Investment Fund Regulations (“Amended Regulations”), published by the Capital Market Authority on 16 Sha’aban 1437H (corresponding to 23 May 2016), detailing requirements for all funds within the Kingdom of Saudi Arabia. The enhanced requirements of Annexure 5(e) of the Amended Regulations are effective from 2017. 3
SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements have been prepared in accordance with the accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). The significant accounting policies used in the preparation of these interim financial statements are consistent with those used and disclosed in the annual financial statements for the year ended 31 December 2016 and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention, modified to include the measurement at fair value of trading securities. Investment valuation Trading investments are valued at market price. Unrealised gains and losses on revaluation and realised gains and losses on disposal of investments are included in the interim statement of operations. Zakat and income tax Zakat and income tax are considered to be the obligation of the Unit Holders and are not provided in the accompanying interim financial statements. Revenue recognition Dividend income is recorded when dividends are declared. Realised gains and losses on investments sold are determined on an average cost basis. Trading income includes all gains and losses from changes in fair value and dividends earned. Expenses Expenses are recognised on an accruals basis. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyal at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations.
6
Al Yusr GCC Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 2017 4
TRADING INVESTMENTS
The composition of the trading investment portfolio on the last valuation date of the period is set out below: Cost SR
Equity investments: 30 June 2017 (Unaudited) Investments in Saudi equity markets Investments in other GCC equity markets
31 December 2016 (Audited) Investments in Saudi equity markets Investments in other GCC equity markets
30 June 2016 (Unaudited) Investments in Saudi equity markets Investments in other GCC equity markets
5
Market value SR
4,094,256 1,259,102 ───────── 5,353,358 ═════════
3,663,956 893,168 ───────── 4,557,124 ═════════
4,162,901 1,358,429 ───────── 5,521,330 ═════════
3,661,418 960,486 ───────── 4,621,904 ═════════
5,361,201 1,363,412 ───────── 6,724,613 ═════════
4,243,587 871,523 ───────── 5,115,110 ═════════
TRADING INCOME (LOSS), NET For the six-month period ended 30 June 2017 2016 (Unaudited) (Unaudited) SR SR
Unrealised gains Dividend income Realized losses
6
1,441,068 149,213 (1,463,967) ───────── 126,314 ═════════
582,105 165,543 (779,988) ───────── (32,340) ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund is managed and administered by the Fund manager. For this service the Fund pays a management fee calculated on every valuation day, at an annual rate of 1.95% of the Fund’s daily net assets. In addition, the Fund manager charges a subscription fee of 1.5% on gross subscriptions to cover administration costs and a redemption fee of 0.5% on redemptions within a month of subscribing, which is reinvested in the Fund. Other expenses paid by the Company on behalf of the Fund are charged to the Fund. In the normal course of business, the Fund places deposits and borrows from or to the Bank at prevailing market rates. The Bank acts as the Fund’s banker and the Fund Manager acts as the custodian to the Fund’s investment. 7
LAST VALUATION DAY
The last valuation day of the period was 30 June 2017 (2016: 30 June 2016). 8
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results. 7
