Al Yusr Morabaha & Sukuk Fund
Saudi Hollandi Capital Company Al Yusr Morabaha and Sukuk Fund UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2015
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund BALANCE SHEET As at 30 June 2015 30 June 2015 (Unaudited) SR
31 December 2014 (Audited) SR
30 June 2014 (Unaudited) SR
177,500,000 243,557,125 177,470,146 1,107,802 2,965,454 ──────── 602,600,527 ────────
131,000,000 164,261,496 109,656,112 809,070 1,683,349 ───────── 407,410,027 ─────────
74,372,097 73,900,000 82,197,500 17,771,807 560,520 ──────── 248,801,924 ────────
44,194,232 26,954 ──────── 44,221,186 ────────
21,480,932 5,287 ───────── 21,486,219 ─────────
20,802 ──────── 20,802 ────────
NET ASSETS
558,379,341 ════════
385,923,808 ═════════
248,781,122 ════════
Units in issue
49,195,276 ════════
34,174,420 ═════════
22,154,592 ════════
Per unit value
11.3503 ════════
11.2927 ═════════
11.2293 ════════
Note ASSETS Bank balance Morabaha placements Held to maturity investments Trading Investments Accrued income Other receivables
LIABILITIES Bank overdraft Accrued expenses
4 5 6
The accompanying notes 1 to 10 form part of these interim financial statements. 2
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund STATEMENT OF OPERATIONS For the six month period ended 30 June 2015
Note INVESTMENT INCOME Special commission income Trading income, net
7
EXPENSES Management fees Other expenses
8
NET INCOME FROM OPERATIONS
10
2015 (Unaudited) SR
2014 (Unaudited) SR
3,650,909 811,358 ───────── 4,462,267 ─────────
1,174,288 222,416 ───────── 1,396,704 ─────────
(1,387,284) (245,622) ───────── (1,632,906) ───────── 2,829,361 ═════════
(361,221) (18,335) ───────── (379,556) ───────── 1,017,148 ═════════
The accompanying notes 1 to 10 form part of these interim financial statements. 3
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund STATEMENT OF CASH FLOWS For the six month period ended 30 June 2015 2015 (Unaudited) SR
2014 (Unaudited) SR
2,829,361
1,017,148
OPERATING ACTIVITIES Net income from operations Adjustment for: Movement in unrealized gains on trading investments
Changes in operating assets and liability: Morabaha placements Held to maturity investments Accrued income Trading investment Accrued expenses Other receivables Net cash used in operating activities FINANCING ACTIVITIES Bank overdraft Proceeds from sale of units Value of units redeemed Net cash from financing activities INCREASE IN BANK BALANCE Bank balance at the beginning of the period BANK BALANCE AT THE END OF THE PERIOD
(809,334) ───────── 2,020,027
(105,158) ───────── 911,990
(19,500,000) (106,295,629) (298,732) (67,004,700) 21,667 (1,282,105) ───────── (192,339,472) ─────────
(46,650,000) (20,997,500) (174,543) 12,582,743 19,165 ───────── (54,308,145) ─────────
22,713,300 423,333,557 (253,707,385) ───────── 192,339,472 ───────── -
156,289,343 (27,992,050) ───────── 128,297,293 ───────── 73,989,148
───────── ═════════
382,949 ───────── 74,372,097 ═════════
3,247,244 ═════════
1,174,288 ═════════
Operational cash flows from special commission income Special commission income received
The accompanying notes 1 to 10 form part of these interim financial statements. 4
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund STATEMENT OF CHANGES IN NET ASSETS For the six month period ended 30 June 2015 2015 (Unaudited) SR
2014 (Unaudited) SR
385,923,808 ─────────
119,466,681 ─────────
2,829,361 ─────────
1,017,148 ─────────
423,333,557 (253,707,385) ───────── 169,626,172 ───────── 558,379,341 ═════════
156,289,343 (27,992,050) ───────── 128,297,293 ───────── 248,781,122 ═════════
2015 (Unaudited) Units
2014 (Unaudited) Units
UNITS AT THE BEGINNING OF THE PERIOD
34,174,420 ─────────
10,715,359 ─────────
Units sold Units redeemed
37,412,480 (22,391,624) ───────── 15,020,856 ───────── 49,195,276 ═════════
13,943,392 (2,504,159) ───────── 11,439,233 ───────── 22,154,592 ═════════
NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income 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
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarised as follows:
Net increase in units UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 10 form part of these interim financial statements. 5
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2015 1
GENERAL
Al Yusr Morabaha and Sukuk Fund (the Fund) is an open-ended fund created by an agreement between the Saudi Hollandi Capital Company (the Fund Manager or the Company), a subsidiary of Saudi Hollandi Bank (the Bank) and investors in the Fund (the Unitholders) and is designed for investors seeking steady capital appreciation with the maximum preservation of capital and liquidity. The assets of the Fund are invested in morabaha transactions and sukuks in accordance with Sharia principles. The fund also invests in other mutual funds with the same objectives. All income is reinvested in the Fund and is reflected in the unit price. The Fund commenced its operations on 8 October 2003. The books and records are maintained in Saudi Riyals (SR). 2
REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (the Regulations) published by Capital Market Authority (CMA) on 22 Dhul Hijja 1427H (corresponding to 12 January 2007) detailing requirements for all funds within the Kingdom of Saudi Arabia. 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 2014 and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention. Investment valuation Investments that are bought with the intention of being held to maturity are carried at cost (adjusted for any premium or discount on an effective yield basis), less permanent decline in value. Trading investments are valued at their market price as at the balance sheet date. Unrealised gains and losses on the revaluation of investments and realised gains and losses on the disposal of investments are recognised in the statement of operations. Morabaha placements are carried at cost less provisions for any uncollectable amounts. commission income as at the period end, is disclosed separately.
Accrued special
Investment transactions Investment transactions are accounted for as of the trade date. Zakat and income tax Zakat/income tax is the obligation of the unit holders and is not provided for in the accompanying financial statements. Revenue recognition Special commission income is recognised on an effective yield basis. Realised gains and losses on investments sold are determined on a weighted average cost basis. Trading income includes all gains and losses from changes in fair value and related interest income or expense and dividends from financial assets held for trading. Expenses Expenses are recognised based on the accrual method.
6
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2015 4
MORABAHA PLACEMENTS
Placements with the Bank Placements with other banks
5
30 June 2015 (Unaudited) SR
31 December 2014 (Audited) SR
30 June 2014 (Unaudited) SR
112,500,000 65,000,000 ──────── 177,500,000 ════════
75,000,000 83,000,000 ──────── 158,000,000 ════════
73,900,000 ──────── 73,900,000 ════════
30 June 2015 (Unaudited) SR
31 December 2014 (Audited) SR
30 June 2014 (Unaudited) SR
54,391,250 33,000,000 28,000,000 28,000,000 24,391,875 20,000,000 20,000,000 15,000,000 13,000,000 4,774,000 3,000,000 ───────── 243,557,125 ═════════
30,000,000 28,000,000 20,000,000 15,000,000 13,000,000 4,894,000 3,000,000 23,367,496 ───────── 137,261,496 ═════════
33,000,000 20,000,000 15,000,000 5,000,000 3,000,000 5,200,000 997,500 ───────── 82,197,500 ═════════
HELD TO MATURITY INVESTMENTS
Debt Securities Al Hilal Bank Sukuk Riyadh Bank – Sukuk Almarai Sukuk 4 Saudi British Bank – Sukuk SGB Sukuk National Commercial Bank Sukuk Najran Cement – Sukuk Saudi Hollandi Bank Sukuk Advance Sukuk Arabian Aramco Total Services Company-Sukuk Saudi Electricity Company-Sukuk – III Saudi Electricity Company-Sukuk II Saudi Hollandi Bank Sukuk II Dar AL-Arkan Sukuk
7
Saudi Hollandi Capital Company – Al Yusr Morabaha & Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2015 6
TRADING INVESTMENTS Cost SR
Market value SR
30 June 2015 (Unaudited) Mutual funds Falcom Saudi Murabaha Fund SAIB Trade Finance Fund MEFIC Saudi Riyal Murabaha Fund Alinma Saudi Riyal Liquidity Fund Total
51,117,258 47,500,000 42,500,000 35,004,701 ───────── 176,121,959 ═════════
51,741,203 47,800,212 42,862,903 35,065,828 ───────── 177,470,146 ═════════
37,500,000 36,117,259 35,500,000 ───────── 109,117,259 ═════════
37,580,601 36,482,699 35,592,812 ───────── 109,656,112 ═════════
17,617,259 ───────── 17,617,259 ═════════
17,771,807 ───────── 17,771,807 ═════════
31 December 2014 (Audited) Mutual funds SAIB Trade Finance Fund Falcom Saudi Murabaha Fund MEFIC Saudi Riyal Murabaha Fund Total 30 June 2014 (Unaudited) Mutual funds Falcom SAR Murabaha Fund
7
TRADING INCOME, NET Six month period ended 30 June 2014 2015 (Unaudited) (Unaudited) SR SR
Unrealised gains Realised gains
809,334 2,024 ───────── 811,358 ═════════
8
105,158 117,258 ───────── 222,416 ═════════
Saudi Hollandi Capital Company – Al Yusr Morabaha & Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2015 8
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 0.5% of the Fund’s daily net assets. 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 morabaha investments, borrows, and purchases and sells securities from or to the Bank at prevailing market rates. The Bank acts as the Fund’s banker and the Company acts as the custodian to the Fund’s investment. During the period the Fund has placed special commission bearing Morabaha placements with the Bank. 9
LAST VALUATION DAY
The last valuation day of the period was 30 June 2015 (2014: 30 June 2014). 10
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
9
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund BALANCE SHEET As at 30 June 2015 30 June 2015 (Unaudited) SR
31 December 2014 (Audited) SR
30 June 2014 (Unaudited) SR
177,500,000 243,557,125 177,470,146 1,107,802 2,965,454 ──────── 602,600,527 ────────
131,000,000 164,261,496 109,656,112 809,070 1,683,349 ───────── 407,410,027 ─────────
74,372,097 73,900,000 82,197,500 17,771,807 560,520 ──────── 248,801,924 ────────
44,194,232 26,954 ──────── 44,221,186 ────────
21,480,932 5,287 ───────── 21,486,219 ─────────
20,802 ──────── 20,802 ────────
NET ASSETS
558,379,341 ════════
385,923,808 ═════════
248,781,122 ════════
Units in issue
49,195,276 ════════
34,174,420 ═════════
22,154,592 ════════
Per unit value
11.3503 ════════
11.2927 ═════════
11.2293 ════════
Note ASSETS Bank balance Morabaha placements Held to maturity investments Trading Investments Accrued income Other receivables
LIABILITIES Bank overdraft Accrued expenses
4 5 6
The accompanying notes 1 to 10 form part of these interim financial statements. 2
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund STATEMENT OF OPERATIONS For the six month period ended 30 June 2015
Note INVESTMENT INCOME Special commission income Trading income, net
7
EXPENSES Management fees Other expenses
8
NET INCOME FROM OPERATIONS
10
2015 (Unaudited) SR
2014 (Unaudited) SR
3,650,909 811,358 ───────── 4,462,267 ─────────
1,174,288 222,416 ───────── 1,396,704 ─────────
(1,387,284) (245,622) ───────── (1,632,906) ───────── 2,829,361 ═════════
(361,221) (18,335) ───────── (379,556) ───────── 1,017,148 ═════════
The accompanying notes 1 to 10 form part of these interim financial statements. 3
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund STATEMENT OF CASH FLOWS For the six month period ended 30 June 2015 2015 (Unaudited) SR
2014 (Unaudited) SR
2,829,361
1,017,148
OPERATING ACTIVITIES Net income from operations Adjustment for: Movement in unrealized gains on trading investments
Changes in operating assets and liability: Morabaha placements Held to maturity investments Accrued income Trading investment Accrued expenses Other receivables Net cash used in operating activities FINANCING ACTIVITIES Bank overdraft Proceeds from sale of units Value of units redeemed Net cash from financing activities INCREASE IN BANK BALANCE Bank balance at the beginning of the period BANK BALANCE AT THE END OF THE PERIOD
(809,334) ───────── 2,020,027
(105,158) ───────── 911,990
(19,500,000) (106,295,629) (298,732) (67,004,700) 21,667 (1,282,105) ───────── (192,339,472) ─────────
(46,650,000) (20,997,500) (174,543) 12,582,743 19,165 ───────── (54,308,145) ─────────
22,713,300 423,333,557 (253,707,385) ───────── 192,339,472 ───────── -
156,289,343 (27,992,050) ───────── 128,297,293 ───────── 73,989,148
───────── ═════════
382,949 ───────── 74,372,097 ═════════
3,247,244 ═════════
1,174,288 ═════════
Operational cash flows from special commission income Special commission income received
The accompanying notes 1 to 10 form part of these interim financial statements. 4
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund STATEMENT OF CHANGES IN NET ASSETS For the six month period ended 30 June 2015 2015 (Unaudited) SR
2014 (Unaudited) SR
385,923,808 ─────────
119,466,681 ─────────
2,829,361 ─────────
1,017,148 ─────────
423,333,557 (253,707,385) ───────── 169,626,172 ───────── 558,379,341 ═════════
156,289,343 (27,992,050) ───────── 128,297,293 ───────── 248,781,122 ═════════
2015 (Unaudited) Units
2014 (Unaudited) Units
UNITS AT THE BEGINNING OF THE PERIOD
34,174,420 ─────────
10,715,359 ─────────
Units sold Units redeemed
37,412,480 (22,391,624) ───────── 15,020,856 ───────── 49,195,276 ═════════
13,943,392 (2,504,159) ───────── 11,439,233 ───────── 22,154,592 ═════════
NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income 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
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarised as follows:
Net increase in units UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 10 form part of these interim financial statements. 5
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2015 1
GENERAL
Al Yusr Morabaha and Sukuk Fund (the Fund) is an open-ended fund created by an agreement between the Saudi Hollandi Capital Company (the Fund Manager or the Company), a subsidiary of Saudi Hollandi Bank (the Bank) and investors in the Fund (the Unitholders) and is designed for investors seeking steady capital appreciation with the maximum preservation of capital and liquidity. The assets of the Fund are invested in morabaha transactions and sukuks in accordance with Sharia principles. The fund also invests in other mutual funds with the same objectives. All income is reinvested in the Fund and is reflected in the unit price. The Fund commenced its operations on 8 October 2003. The books and records are maintained in Saudi Riyals (SR). 2
REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (the Regulations) published by Capital Market Authority (CMA) on 22 Dhul Hijja 1427H (corresponding to 12 January 2007) detailing requirements for all funds within the Kingdom of Saudi Arabia. 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 2014 and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention. Investment valuation Investments that are bought with the intention of being held to maturity are carried at cost (adjusted for any premium or discount on an effective yield basis), less permanent decline in value. Trading investments are valued at their market price as at the balance sheet date. Unrealised gains and losses on the revaluation of investments and realised gains and losses on the disposal of investments are recognised in the statement of operations. Morabaha placements are carried at cost less provisions for any uncollectable amounts. commission income as at the period end, is disclosed separately.
Accrued special
Investment transactions Investment transactions are accounted for as of the trade date. Zakat and income tax Zakat/income tax is the obligation of the unit holders and is not provided for in the accompanying financial statements. Revenue recognition Special commission income is recognised on an effective yield basis. Realised gains and losses on investments sold are determined on a weighted average cost basis. Trading income includes all gains and losses from changes in fair value and related interest income or expense and dividends from financial assets held for trading. Expenses Expenses are recognised based on the accrual method.
6
Saudi Hollandi Capital Company – Al Yusr Morabaha and Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2015 4
MORABAHA PLACEMENTS
Placements with the Bank Placements with other banks
5
30 June 2015 (Unaudited) SR
31 December 2014 (Audited) SR
30 June 2014 (Unaudited) SR
112,500,000 65,000,000 ──────── 177,500,000 ════════
75,000,000 83,000,000 ──────── 158,000,000 ════════
73,900,000 ──────── 73,900,000 ════════
30 June 2015 (Unaudited) SR
31 December 2014 (Audited) SR
30 June 2014 (Unaudited) SR
54,391,250 33,000,000 28,000,000 28,000,000 24,391,875 20,000,000 20,000,000 15,000,000 13,000,000 4,774,000 3,000,000 ───────── 243,557,125 ═════════
30,000,000 28,000,000 20,000,000 15,000,000 13,000,000 4,894,000 3,000,000 23,367,496 ───────── 137,261,496 ═════════
33,000,000 20,000,000 15,000,000 5,000,000 3,000,000 5,200,000 997,500 ───────── 82,197,500 ═════════
HELD TO MATURITY INVESTMENTS
Debt Securities Al Hilal Bank Sukuk Riyadh Bank – Sukuk Almarai Sukuk 4 Saudi British Bank – Sukuk SGB Sukuk National Commercial Bank Sukuk Najran Cement – Sukuk Saudi Hollandi Bank Sukuk Advance Sukuk Arabian Aramco Total Services Company-Sukuk Saudi Electricity Company-Sukuk – III Saudi Electricity Company-Sukuk II Saudi Hollandi Bank Sukuk II Dar AL-Arkan Sukuk
7
Saudi Hollandi Capital Company – Al Yusr Morabaha & Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2015 6
TRADING INVESTMENTS Cost SR
Market value SR
30 June 2015 (Unaudited) Mutual funds Falcom Saudi Murabaha Fund SAIB Trade Finance Fund MEFIC Saudi Riyal Murabaha Fund Alinma Saudi Riyal Liquidity Fund Total
51,117,258 47,500,000 42,500,000 35,004,701 ───────── 176,121,959 ═════════
51,741,203 47,800,212 42,862,903 35,065,828 ───────── 177,470,146 ═════════
37,500,000 36,117,259 35,500,000 ───────── 109,117,259 ═════════
37,580,601 36,482,699 35,592,812 ───────── 109,656,112 ═════════
17,617,259 ───────── 17,617,259 ═════════
17,771,807 ───────── 17,771,807 ═════════
31 December 2014 (Audited) Mutual funds SAIB Trade Finance Fund Falcom Saudi Murabaha Fund MEFIC Saudi Riyal Murabaha Fund Total 30 June 2014 (Unaudited) Mutual funds Falcom SAR Murabaha Fund
7
TRADING INCOME, NET Six month period ended 30 June 2014 2015 (Unaudited) (Unaudited) SR SR
Unrealised gains Realised gains
809,334 2,024 ───────── 811,358 ═════════
8
105,158 117,258 ───────── 222,416 ═════════
Saudi Hollandi Capital Company – Al Yusr Morabaha & Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2015 8
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 0.5% of the Fund’s daily net assets. 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 morabaha investments, borrows, and purchases and sells securities from or to the Bank at prevailing market rates. The Bank acts as the Fund’s banker and the Company acts as the custodian to the Fund’s investment. During the period the Fund has placed special commission bearing Morabaha placements with the Bank. 9
LAST VALUATION DAY
The last valuation day of the period was 30 June 2015 (2014: 30 June 2014). 10
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
9
