AlAhli Diversified US Dollar Fund
AlAhli Diversified US Dollar Fund
AlAhli Diversified US Dollar Fund – Interim Report A. Fund Manager 1. The Fund Manager is NCB Capital Company. Address: King Saud Road, P.O. Box 22216, Riyadh 11495, Kingdom of Saudi Arabia, Tel: +966 920000232
Fax +966 114060049
Website: www.alahlicapital.com
2. Sub-manager / investment adviser None 3. Investment activities During the first half of 2017, the fund focused on short term Murabaha investments with GCC banks. This was driven by mainly;
The liquidity needs of banks in the GCC.
The expectation of redemptions. The fund strategy was conservative given the circumstances, the strategy helped the fund manager over perform the benchmark.
4. Fund’s performance During the first half of 2017, the fund over-performed the benchmark by 0.17%. The Assets Under Management (AUM) have Increased by 3.5% and closed the period at USD 270.6 MM. 5. T&C’s Material changes The Fund Manager has made the following revisions to the fund terms and conditions: Changing the fund name to “AlAhli Diversified US Dollar Fund” Appointment of Basmah Al Tuwaijri as an independent board members. The fund has the right to invest in securities issued by the fund manager or its affiliates. Amendments in paragraph (9) “Principal Investment Strategies” long-term Fixed income instruments are added to the investment universe, and amending the maximum limit on investing in other investment funds to be 50%. Also, amendments in paragraph 25 by emphasizing conditions that might cause the fund manager to suspend subscriptions or
NCB Capital is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia under license number 37-06046. The registered office is at King Saud Road, NCB Regional Building P.O. Box 22216, 11495 Riyadh, Kingdom of Saudi Arabia T: +966 11 874 7106 F: +966 11 406 0049 www.alahlicapital.com
06046-37 شركة األهلي المالية (األهلي كابيتال) هي شركة مرخصــة من قبــل هيئة السـوق الماليــــة ترخيـص رقم ، 22216 ص ب، المبنى اإلقليمي للبنك األهلي التجاري، طريق الملك سعود:وعنوان مركزها الرئيسي المسجل. المملكة العربية السعودية، 11495 الرياض www.alahlicapital.com +966 11 406 0049 : ف+966 11 874 7106 :هـ
redemptions requests. 6. The fund does not invest substantially in other investment funds.
7. No special commissions were received by the fund manager during the period.
8. Conflict of interest The Fund Board of AlAhli Diversified US Dollar Fund has agreed to purchase Saudi Sovereign Sukuk from the primary market (the “Sukuk”) which could result in a potential conflict of interest.
B. Financial Statements
NCB Capital is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia under license number 37-06046. The registered office is at King Saud Road, NCB Regional Building P.O. Box 22216, 11495 Riyadh, Kingdom of Saudi Arabia T: +966 11 874 7106 F: +966 11 406 0049 www.alahlicapital.com
06046-37 شركة األهلي المالية (األهلي كابيتال) هي شركة مرخصــة من قبــل هيئة السـوق الماليــــة ترخيـص رقم ، 22216 ص ب، المبنى اإلقليمي للبنك األهلي التجاري، طريق الملك سعود:وعنوان مركزها الرئيسي المسجل. المملكة العربية السعودية، 11495 الرياض www.alahlicapital.com +966 11 406 0049 : ف+966 11 874 7106 :هـ
AL –AHLI DIVERSIFIED US DOLLAR FUND (Formerly Al-Ahli Diversified US Dollar Trade Fund) (Managed by NCB Capital Company) INTERIM FINANCIAL STATEMENTS (unaudited) For the six months period ended 30 June 2017 with REVIEW REPORT TO THE UNITHOLDER
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM BALANCE SHEET As at 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated) 30 June 2017 (Unaudited)
Notes
31 December 2016 (Audited)
30 June 2016 (Unaudited)
ASSETS Cash and cash equivalents
7
3,462
66
273
Held to maturity investments
9 (i)
259,564
254,333
282,441
Held for trading investments
9 (ii)
7,812
7,065
15,567
270,838
261,464
298,281
169
1
262
270,669
261,463
298,019
212,878
206,986
237,336
1.271
1.2632
1.2556
Total assets LIABILITY Payable to unitholders on account of redemption Net assets attributable to unitholders Units in issue in thousands (number)
10
Net assets value per unit (USD)
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 2
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM STATEMENT OF INCOME (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated)
Note
30 June 2017
30 June 2016
INVESTMENT REVENUE Profit on Murabaha contracts
1,714
1,892
Sukuk income
1,136
774
Realised loss on sale of held for trading investments
(294)
(70)
Unrealized gain on held for trading investments
46
5
Other income
15
--
2,617
2,601
921
1,066
Audit fee
3
4
Shariah audit fee
3
4
Fund Board remuneration
2
2
CMA fee
1
1
15
19
945
1,096
1,672
1,505
Total revenue EXPENSES
8
Management fee
Administrative expenses Total expenses NET INCOME FOR THE PERIOD
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 3
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM STATEMENT OF CASH FLOWS (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated)
Note
30 June 2017
Cash flow from operating activities Net income for the period Adjustment for: Value of units reinvested Unrealised gain on held for trading investments
30 June 2016
1,672
1,505
-(46) 1,626
1,096 (5) 2,596
(5,231) (701)
(49,158) (4,678)
168 --
-260
(4,138)
(50,980)
57,823 (50,289)
146,964 (95,822)
Net cash provided by financing activities
7,534
51,142
Net increase in cash and cash equivalents
3,396
162
Changes in operating assets and liabilities: Increase in held to maturity investments Increase in held for trading investments Increase in payable to unitholders on account of redemptions Increase in accounts payable Net cash (used in) / provided by operating activities Cash flow from financing activities Proceeds from units sold Value of units redeemed
Cash and cash equivalents at the beginning of the period
7
66
111
Cash and cash equivalents at the end of the period
7
3,462
273
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 4
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS For the six months period ended 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated)
Notes Net assets attributable to unitholders at the beginning of the period (audited) Net income for the period Increase in net assets from unit transactions during the period
261,463
244,276
1,672
1,505
57,823
146,964
--
1,096
(50,289)
(95,822)
7,534
52,238
270,669
298,019
8
Value of units redeemed
Net assets attributable to unitholders at the end of the period (unaudited)
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 5
30 June 2016
10
Proceeds from units sold Value of units reinvested
30 June 2017
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 1.
THE FUND AND ITS ACTIVITIES
Al-Ahli Diversified US Dollar Fund (formerly Al-Ahli Diversified US Dollar Trade Fund) ("the Fund") is a Shariah compliant open-ended investment fund, managed by NCB Capital Company ("the Fund Manager"), a subsidiary of The National Commercial Bank (the "Bank"), for the benefit of the Fund's Unitholders. The Fund is established under Article 30 of the Investment Fund Regulations (the Regulations) issued by the Capital Market Authority (CMA). NCB Capital Company also acts as the custodian of the Fund. As defined in Capital Market Authority's Regulation No. 2-83-2005 dated 21 Jumada Awal 1426H (28 June 2005) the Fund Manager conducts following securities’ activities: a) b) c) d) e)
Dealing; Arranging; Managing; Advising; Custody;
The Fund offers investors the opportunity to participate in trade transactions which conform to Shariah principles, invest in Sukuks and other mutual funds or instrument that comply with Islamic Shariah investment principles. The terms and conditions of the Fund were originally approved by the Saudi Arabian Monetary Agency (SAMA) and subsequently endorsed by the CMA through its letter dated 16 December 2008. The Fund commenced its operations on 2 October 2003. The results for the six months period ended 30 June 2017 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017. 2.
REGULATING AUTHORITY
The Fund is governed by the Regulations issued by the CMA pursuant to resolution number 7-2192006 dated 3 Dhul Hijja 1427H (corresponding to 24 December 2006) as amended by the Resolution No 1/61/2016 of Board of the CMA dated 16 Sha’ban 1437H (corresponding to 23 May 2016), which provided detailed requirements for all funds within the Kingdom of Saudi Arabia. 3.
CHANGES IN FUND’S TERMS AND CONDITIONS
During the period ended 30 June 2017, the Fund Manager has made a revision to the terms and conditions of the Fund. The change in the terms and conditions relate to amend the strategy and name of the Fund. The change in the terms and conditions do not have any impact on these interim financial statements. The amendment in the strategy and name of the Fund was approved by CMA through its letter dated 5 December 2015. The change was notified by the Fund manager to the Unitholders through a letter dated 27 December 2016 and the changes were implemented from 21 March 2017.
6
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 4.
SUBSCRIPTIONS / REDEMPTIONS
The Fund is open for subscriptions / redemptions of units on every Saudi Business day. The net asset value of the fund is determined on each Saudi Business day. All transactions for purchase / sale of units, are entered on the net assets value of the Fund, determined by dividing the value of net assets of the Fund by the number of outstanding units prior to such transaction. 5.
BASIS OF PREPARATION
Statement of compliance These interim financial statements are prepared in accordance with generally accepted accounting standards in the Kingdom of Saudi Arabia promulgated by Saudi Organization for Certified Public Accountants (“SOCPA”). The Fund prepares its interim financial statements as at and for the period ended on its last valuation date (note 12). The Fund presents comparative numbers of December in Balance Sheet and its related notes as additional information for benefit of Unitholders. Basis of measurement These interim financial statements have been prepared under the historical cost convention using the accrual basis of accounting and the going concern concept, except for held for trading investments which are carried at fair value. Functional and presentation currency These interim financial statements are presented in U.S. Dollars (US$), which is the Fund’s functional currency. All financial information presented in U.S. Dollars has been rounded to the nearest thousand. Use of estimates and judgments The preparation of the financial statements in conformity with the generally accepted accounting standards as applicable in the Kingdom of Saudi Arabia requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues 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 year in which the estimates are revised and in any future years affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the interim financial statements have been consistent with those used in the preparation of annual financial statements of the Funds for the year ended December 31, 2016.
7
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 5.
BASIS OF PREPARATION (continued)
Use of estimates and judgments (continued) Valuation of financial assets Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the Fund's financial instruments are accounted for under the historical cost convention, except for held for trading investments, differences may arise between the carrying values and fair values. The Fund Manager believes that at the reporting date, the fair values of the Fund's financial assets and liabilities are not materially different from their carrying values. The Fund measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
Level 1: Fair value measurements using quoted price (unadjusted) in an active market for identical assets or liabilities. Level 2: Fair value measurements using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Fair value measurement using inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
All financial assets of the fund, carried at fair value at the reporting date, are classified under hierarchy level 2. 6.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently in respect of all periods presented in these financial statements. a)
Investments
Investments having fixed or determinable payments and fixed maturity that the management has the positive intention and ability to hold to maturity are classified as held to maturity. Investments in Murabaha contracts and Sukuk are classified as Held to Maturity Investments are initially recognized at fair value including direct and incremental transaction cost. Subsequent to initial measurement these are measured at amortised cost less impairment losses, if any. Investments in Mutual Funds are classified as held for trading investments and are initially recognised at cost, being the fair value of consideration given. After initial recognition investments in mutual funds are valued at the unit price prevailing on the last valuation day of the period. Unrealised gains and losses are recognised in the statement of income. b)
Investment transaction
Investment transactions in Murabaha contracts and sukuk are accounted for as of the settlement date and investments in mutual funds are accounted for as of the trade date. 8
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 6.
SIGNIFICANT ACCOUNTING POLICIES (continued)
c)
Impairment of financial assets
An assessment is made at the balance sheet date to determine whether there is objective evidence that a specific financial asset may be impaired. If such evidence exists, any impairment loss is recognised in the statement of Income. If a financial asset is impaired, impairment is determined as follows: (i) (ii) (ii)
d)
For assets carried at fair value, impairment is the difference between cost and fair value, less any impairment loss previously recognised in the statement of income; For assets carried at cost, impairment is the difference between carrying value and the present value of future cash flows discounted at the current market rate of return for a similar financial asset; For assets carried at amortised cost, impairment is the difference between carrying amount and the present value of future cash flows discounted at the original effective commission rate. Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised where: (i) The rights to receive cash flows from the asset have expired; or (ii) The Fund has transferred its rights to receive cash flows from the asset; and (iii) Either (i) the Fund has transferred substantially all the risks and rewards of the asset, or (ii) the Fund has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Fund has transferred its rights to receive cash flows from an asset, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Fund’s continuing involvement in the asset. e)
Revenue recognition
Revenue on Murabaha contracts and Sukuk is recognised on a time-apportioned basis over the period of the contract based on the principal amounts outstanding. Increases or decreases in the difference between the cost and market value of the Fund’s investments in mutual funds at period end are recognised as unrealised gains or losses on held for trading investments in the statement of income. Realised gains and losses on held for trading investments sold are determined as difference between sales proceeds and cost determined on weighted average basis. f)
Foreign currency transactions
Transactions during the year in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the dates of the transactions. Monetary assets and liabilities that are denominated in a foreign currency are retranslated at the rate of exchange ruling at the balance sheet date. Exchange gains or losses are reflected in the statement of Income.
9
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 6.
SIGNIFICANT ACCOUNTING POLICIES (continued)
g)
Taxation/zakat
Taxation/zakat is the obligation of the unitholders and therefore, no provision for such liability is made in these financial statements. h)
Cash and cash equivalents
For the purposes of the statement of cashflows, cash and cash equivalents consist of bank balances. i)
Net asset value per unit
The net asset value per unit is calculated by dividing the net assets attributable to Unitholders included in the balance sheet by the number of units outstanding at the period end. j)
Provisions and accruals
Provisions and accruals are recognized when the Fund has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and can be measured reliably. k)
Offsetting
Financial assets and liabilities are offset and reported net in the balance sheet when there is a legally enforceable right to set off the recognized amounts and when the Fund intends to settle on a net basis, or to realize the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under accounting standards generally accepted in the Kingdom of Saudi Arabia, or for gains and losses arising from a group of similar transactions. 7.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash held in current accounts with National Commercial Bank (a related party). 8.
MANAGEMENT FEE AND OTHER EXPENSES
The Fund is managed and administered by the Fund Manager. For these services, the Fund accrues, daily a management fee, as determined by the Fund Manager, which should not be more than the maximum annual rate of 0.75% p.a. of the Fund's daily net assets as set out in the Fund’s terms and conditions. The Fund Manager is also entitled to recover expenses incurred on behalf of the Fund relating to audit, custody, advisory, data processing and other similar charges. The maximum amount of such expenses that can be recovered from the Fund by the Fund Manager is restricted to 0.5% per annum of the Fund's net assets at the respective valuation days. These expenses have been recovered by the Fund Manager on an actual basis except for custody fess, which is borne by the Fund Manager. Until 23 July 2016, the Fund Manager was allocated units against settlement of the management fee and other expenses on every valuation day, which were reinvested in the Fund. Subsequent to this date these expenses are settled in cash. 10
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 9.
INVESTMENTS
i)
Held to maturity investments
Held to maturity investments comprises of the following: 30 June 2017 Investment in Murabaha contracts (note 9 (i) (a)) Investment in Sukuks (note 9 (i) (b))
a)
204,196 55,368 259,564
31 December 2016 203,028 51,305 254,333
30 June 2016 250,564 31,877 282,441
Investment in Murabaha contracts comprises of the following Murabaha: % of total Value
Cost
Carrying value
National Bank of Kuwait Emirates NBD Masraf Al Rayan Saudi Investment Bank Bank Al Jazira Commercial Bank International Gulf International Bank Qatar Islamic Bank National Commercial Bank (a related party) Khaleeji Commercial Bank Saudi American Bank
20.88 17.39 7.31 5.09 4.92 4.54 4.52 3.78 3.70 3.12 1.12
55,750 46,250 19,450 13,600 13,100 12,100 12,000 10,100 9,750 8,300 3,000
55,828 46,485 19,551 13,608 13,149 12,137 12,077 10,120 9,894 8,347 3,000
30 June 2017 (Unaudited)
76.37
203,400
204,196
31 December 2016 (Audited)
77.71
201,970
203,028
30 June 2016 (Unaudited)
84.17
249,590
250,564
Murabaha contracts as at 30 June 2017 carry profit ranging from 1% to 2.7% (June 2016: 1% to 2.5%) and have maturities ranging from 1 to 9 months (June 2016: 1 to 12 months) from period end.
11
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 9.
INVESTMENTS (continued)
i)
Held to maturity investments (continued)
b)
Investment in Sukuks comprises of the following Sukuks: % of total Value
3.6 3.76 4.21 3.47
3.86 2.33 2.00 1.95
10,285 6,186 5,348 5,200
10,316 6,231 5,341 5,211
Semi-annually Semi-annually Semi-annually Semi-annually
3.95 4 3.86 3.66 3.08 6.4 3.86 2.92 6.27 5.62
1.69 1.59 1.51 1.14 1.13 0.82 0.77 0.75 0.59 0.58
4,514 4,240 4,035 3,008 2,985 2,181 2,054 1,993 1,593 1,538
4,527 4,247 4,041 3,046 3,014 2,204 2,054 1,997 1,575 1,564
Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually
30 June 2017 (Unaudited)
20.71
55,158
55,368
31 December 2016 (Audited)
19.58
51,295
51,305
30 June 2016 (Unaudited)
10.60
31,904
31,877
Cost
Carrying value
Profit Payment Frequency
Coupon rate % Investment in Sukuks Floating rate Sukuks Dubai Islamic Bank Sharjah Sukuk Ltd Saudi Electricity Global Saudi Electricity Global Turkiey Finans Katilim Bankasi A.S. (a related party) Saudi Electricity Global Unity 1 Sukuk Limited Dubai Islamic Bank SIB Sukuk Co Ltd EMAAR Unity 1 Sukuk Limited Dubai Islamic Bank CBB International Sukuk CBB International Sukuk
ii)
Held for trading investments % of Value
Cost
Value
Investment in mutual fund - held for trading Al-Ahli International Trade Fund (3,058,012 Units) (a related party)
2.92
7,683
7,812
30 June 2017 (Unaudited)
2.92
7,683
7,812
31 December 2016 (Audited)
2.71
6,982
7,065
30 June 2016 (Unaudited)
5.23
15,460
15,567
12
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 9.
INVESTMENTS (continued)
The expected maturity profile of the above held to maturity and held for trading investments is as follows: Up to 6 months
6 months – 1 year
1-3 years
3-5 years
No fixed maturity
Over 5 -years
Total
Investment in Murabaha contracts
171,321
32,875
--
--
--
--
204,196
Investment in Sukuk
--
4,527
5,775
27,812
17,254
--
55,368
Al-Ahli International Trade Fund
--
--
--
--
--
7,812
7,812
30 June 2017 (Unaudited)
171,321
37,402
5,775
27,812
17,254
7,812
267,376
31 December 2016 (Audited)
196,673
11,815
6,097
17,284
22,464
7,065
261,398
30 June 2016 (Unaudited)
235,566
42,058
4,505
--
--
15,567
297,696
10.
UNIT TRANSACTIONS
Transactions in units during the period are summarised as follows: For the sixmonths period ended 30 June 2017 Units ‘000
For the sixmonths period ended 30 June 2016 Units ‘000
206,986
195,536
45,589
117,375
Units reinvested
--
875
Units redeemed
(39,697)
(76,450)
5,892
41,800
212,878
237,336
Units at the beginning of the period (audited) Units sold
Net increase in units Units at the end of the period (unaudited)
As at 30 June 2017, top five unitholders represented 36.27% (30 June 2016: 45.79%) of the Fund’s units. 13
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 11.
RELATED PARTY TRANSACTIONS
In the ordinary course of its activities, the Fund transacts business with related parties on the basis of approved terms and conditions of the Fund. All related party transactions are approved by the Fund Board. Name of entity
Relationship
NCB Capital Company National Commercial Bank (NCB) Al Ahli Takaful Company Al-Ahli Multi-Asset Conservative Fund Al-Ahli Multi-Asset Moderate Fund Al-Ahli Multi-Asset Growth Fund Al-Ahli Multi-Asset Income Plus Fund Al-Ahli US Dollar Sukuk Fund
Fund Manager Shareholder of Fund Manager Associate of NCB Unitholder Unitholder Unitholder Unitholder Unitholder
In addition to the below disclosure, balances with related parties are also disclosed in note 7 and 9. The significant related party transactions entered into by the Fund during the period and balances resulting from such transactions are as follows: Value of units held as at 30 June 2017 2016
Related party
Nature of transaction
NCBC
Management fee
921
1,066
Expenses paid on behalf of the fund
24
30
Subscription of units
5,800
7,700
Redemption of units
4,860
3,200
Al-Ahli Multi- Subscription of units Asset Moderate Fund Redemption of units
4,300
1,800
2,500
4,200
Al-Ahli MultiAsset Growth Fund
Subscription of units
--
1,000
Redemption of units
--
--
Al-Ahli MultiAsset Income Plus Fund
Subscription of units
6,313
3,466
Redemption of units
1,500
--
Al-Ahli MultiAsset Conservative Fund
Amount of transactions 2017 2016
14
20,243
49,476
6,264
32,165
1,806
4,236
--
1,000
4,831
3,466
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 11.
RELATED PARTY TRANSACTIONS (continued)
Related party
Al Ahli US Dollar Sukuk Fund 12.
Nature of Transaction
Amount of transactions 2017 2016
Subscription of units
6,420
10
Redemption of units
6,365
3,590
Value of units held as at 30 June 2017 2016
2,041
514
LAST VALUATION DAY
The last valuation day of the period was 22 June 2017 (30 June 2016: 30 June 2016). There is no significant change in the net asset value per unit of the Fund between last valuation and 30 June 2017. 13.
APPROVAL OF THE FINANCIAL STATEMENTS
These interim financial statements were approved by the Fund Manager on Dhul Qadah 23, 1438H, corresponding to August 15, 2017.
15
AlAhli Diversified US Dollar Fund – Interim Report A. Fund Manager 1. The Fund Manager is NCB Capital Company. Address: King Saud Road, P.O. Box 22216, Riyadh 11495, Kingdom of Saudi Arabia, Tel: +966 920000232
Fax +966 114060049
Website: www.alahlicapital.com
2. Sub-manager / investment adviser None 3. Investment activities During the first half of 2017, the fund focused on short term Murabaha investments with GCC banks. This was driven by mainly;
The liquidity needs of banks in the GCC.
The expectation of redemptions. The fund strategy was conservative given the circumstances, the strategy helped the fund manager over perform the benchmark.
4. Fund’s performance During the first half of 2017, the fund over-performed the benchmark by 0.17%. The Assets Under Management (AUM) have Increased by 3.5% and closed the period at USD 270.6 MM. 5. T&C’s Material changes The Fund Manager has made the following revisions to the fund terms and conditions: Changing the fund name to “AlAhli Diversified US Dollar Fund” Appointment of Basmah Al Tuwaijri as an independent board members. The fund has the right to invest in securities issued by the fund manager or its affiliates. Amendments in paragraph (9) “Principal Investment Strategies” long-term Fixed income instruments are added to the investment universe, and amending the maximum limit on investing in other investment funds to be 50%. Also, amendments in paragraph 25 by emphasizing conditions that might cause the fund manager to suspend subscriptions or
NCB Capital is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia under license number 37-06046. The registered office is at King Saud Road, NCB Regional Building P.O. Box 22216, 11495 Riyadh, Kingdom of Saudi Arabia T: +966 11 874 7106 F: +966 11 406 0049 www.alahlicapital.com
06046-37 شركة األهلي المالية (األهلي كابيتال) هي شركة مرخصــة من قبــل هيئة السـوق الماليــــة ترخيـص رقم ، 22216 ص ب، المبنى اإلقليمي للبنك األهلي التجاري، طريق الملك سعود:وعنوان مركزها الرئيسي المسجل. المملكة العربية السعودية، 11495 الرياض www.alahlicapital.com +966 11 406 0049 : ف+966 11 874 7106 :هـ
redemptions requests. 6. The fund does not invest substantially in other investment funds.
7. No special commissions were received by the fund manager during the period.
8. Conflict of interest The Fund Board of AlAhli Diversified US Dollar Fund has agreed to purchase Saudi Sovereign Sukuk from the primary market (the “Sukuk”) which could result in a potential conflict of interest.
B. Financial Statements
NCB Capital is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia under license number 37-06046. The registered office is at King Saud Road, NCB Regional Building P.O. Box 22216, 11495 Riyadh, Kingdom of Saudi Arabia T: +966 11 874 7106 F: +966 11 406 0049 www.alahlicapital.com
06046-37 شركة األهلي المالية (األهلي كابيتال) هي شركة مرخصــة من قبــل هيئة السـوق الماليــــة ترخيـص رقم ، 22216 ص ب، المبنى اإلقليمي للبنك األهلي التجاري، طريق الملك سعود:وعنوان مركزها الرئيسي المسجل. المملكة العربية السعودية، 11495 الرياض www.alahlicapital.com +966 11 406 0049 : ف+966 11 874 7106 :هـ
AL –AHLI DIVERSIFIED US DOLLAR FUND (Formerly Al-Ahli Diversified US Dollar Trade Fund) (Managed by NCB Capital Company) INTERIM FINANCIAL STATEMENTS (unaudited) For the six months period ended 30 June 2017 with REVIEW REPORT TO THE UNITHOLDER
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM BALANCE SHEET As at 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated) 30 June 2017 (Unaudited)
Notes
31 December 2016 (Audited)
30 June 2016 (Unaudited)
ASSETS Cash and cash equivalents
7
3,462
66
273
Held to maturity investments
9 (i)
259,564
254,333
282,441
Held for trading investments
9 (ii)
7,812
7,065
15,567
270,838
261,464
298,281
169
1
262
270,669
261,463
298,019
212,878
206,986
237,336
1.271
1.2632
1.2556
Total assets LIABILITY Payable to unitholders on account of redemption Net assets attributable to unitholders Units in issue in thousands (number)
10
Net assets value per unit (USD)
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 2
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM STATEMENT OF INCOME (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated)
Note
30 June 2017
30 June 2016
INVESTMENT REVENUE Profit on Murabaha contracts
1,714
1,892
Sukuk income
1,136
774
Realised loss on sale of held for trading investments
(294)
(70)
Unrealized gain on held for trading investments
46
5
Other income
15
--
2,617
2,601
921
1,066
Audit fee
3
4
Shariah audit fee
3
4
Fund Board remuneration
2
2
CMA fee
1
1
15
19
945
1,096
1,672
1,505
Total revenue EXPENSES
8
Management fee
Administrative expenses Total expenses NET INCOME FOR THE PERIOD
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 3
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM STATEMENT OF CASH FLOWS (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated)
Note
30 June 2017
Cash flow from operating activities Net income for the period Adjustment for: Value of units reinvested Unrealised gain on held for trading investments
30 June 2016
1,672
1,505
-(46) 1,626
1,096 (5) 2,596
(5,231) (701)
(49,158) (4,678)
168 --
-260
(4,138)
(50,980)
57,823 (50,289)
146,964 (95,822)
Net cash provided by financing activities
7,534
51,142
Net increase in cash and cash equivalents
3,396
162
Changes in operating assets and liabilities: Increase in held to maturity investments Increase in held for trading investments Increase in payable to unitholders on account of redemptions Increase in accounts payable Net cash (used in) / provided by operating activities Cash flow from financing activities Proceeds from units sold Value of units redeemed
Cash and cash equivalents at the beginning of the period
7
66
111
Cash and cash equivalents at the end of the period
7
3,462
273
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 4
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) INTERIM STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS For the six months period ended 30 June 2017 Expressed in US Dollars ‘000 (unless otherwise stated)
Notes Net assets attributable to unitholders at the beginning of the period (audited) Net income for the period Increase in net assets from unit transactions during the period
261,463
244,276
1,672
1,505
57,823
146,964
--
1,096
(50,289)
(95,822)
7,534
52,238
270,669
298,019
8
Value of units redeemed
Net assets attributable to unitholders at the end of the period (unaudited)
The accompanying notes 1 to 13 form an integral part of these interim financial statements. 5
30 June 2016
10
Proceeds from units sold Value of units reinvested
30 June 2017
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 1.
THE FUND AND ITS ACTIVITIES
Al-Ahli Diversified US Dollar Fund (formerly Al-Ahli Diversified US Dollar Trade Fund) ("the Fund") is a Shariah compliant open-ended investment fund, managed by NCB Capital Company ("the Fund Manager"), a subsidiary of The National Commercial Bank (the "Bank"), for the benefit of the Fund's Unitholders. The Fund is established under Article 30 of the Investment Fund Regulations (the Regulations) issued by the Capital Market Authority (CMA). NCB Capital Company also acts as the custodian of the Fund. As defined in Capital Market Authority's Regulation No. 2-83-2005 dated 21 Jumada Awal 1426H (28 June 2005) the Fund Manager conducts following securities’ activities: a) b) c) d) e)
Dealing; Arranging; Managing; Advising; Custody;
The Fund offers investors the opportunity to participate in trade transactions which conform to Shariah principles, invest in Sukuks and other mutual funds or instrument that comply with Islamic Shariah investment principles. The terms and conditions of the Fund were originally approved by the Saudi Arabian Monetary Agency (SAMA) and subsequently endorsed by the CMA through its letter dated 16 December 2008. The Fund commenced its operations on 2 October 2003. The results for the six months period ended 30 June 2017 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017. 2.
REGULATING AUTHORITY
The Fund is governed by the Regulations issued by the CMA pursuant to resolution number 7-2192006 dated 3 Dhul Hijja 1427H (corresponding to 24 December 2006) as amended by the Resolution No 1/61/2016 of Board of the CMA dated 16 Sha’ban 1437H (corresponding to 23 May 2016), which provided detailed requirements for all funds within the Kingdom of Saudi Arabia. 3.
CHANGES IN FUND’S TERMS AND CONDITIONS
During the period ended 30 June 2017, the Fund Manager has made a revision to the terms and conditions of the Fund. The change in the terms and conditions relate to amend the strategy and name of the Fund. The change in the terms and conditions do not have any impact on these interim financial statements. The amendment in the strategy and name of the Fund was approved by CMA through its letter dated 5 December 2015. The change was notified by the Fund manager to the Unitholders through a letter dated 27 December 2016 and the changes were implemented from 21 March 2017.
6
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 4.
SUBSCRIPTIONS / REDEMPTIONS
The Fund is open for subscriptions / redemptions of units on every Saudi Business day. The net asset value of the fund is determined on each Saudi Business day. All transactions for purchase / sale of units, are entered on the net assets value of the Fund, determined by dividing the value of net assets of the Fund by the number of outstanding units prior to such transaction. 5.
BASIS OF PREPARATION
Statement of compliance These interim financial statements are prepared in accordance with generally accepted accounting standards in the Kingdom of Saudi Arabia promulgated by Saudi Organization for Certified Public Accountants (“SOCPA”). The Fund prepares its interim financial statements as at and for the period ended on its last valuation date (note 12). The Fund presents comparative numbers of December in Balance Sheet and its related notes as additional information for benefit of Unitholders. Basis of measurement These interim financial statements have been prepared under the historical cost convention using the accrual basis of accounting and the going concern concept, except for held for trading investments which are carried at fair value. Functional and presentation currency These interim financial statements are presented in U.S. Dollars (US$), which is the Fund’s functional currency. All financial information presented in U.S. Dollars has been rounded to the nearest thousand. Use of estimates and judgments The preparation of the financial statements in conformity with the generally accepted accounting standards as applicable in the Kingdom of Saudi Arabia requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues 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 year in which the estimates are revised and in any future years affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the interim financial statements have been consistent with those used in the preparation of annual financial statements of the Funds for the year ended December 31, 2016.
7
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 5.
BASIS OF PREPARATION (continued)
Use of estimates and judgments (continued) Valuation of financial assets Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the Fund's financial instruments are accounted for under the historical cost convention, except for held for trading investments, differences may arise between the carrying values and fair values. The Fund Manager believes that at the reporting date, the fair values of the Fund's financial assets and liabilities are not materially different from their carrying values. The Fund measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
Level 1: Fair value measurements using quoted price (unadjusted) in an active market for identical assets or liabilities. Level 2: Fair value measurements using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Fair value measurement using inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
All financial assets of the fund, carried at fair value at the reporting date, are classified under hierarchy level 2. 6.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently in respect of all periods presented in these financial statements. a)
Investments
Investments having fixed or determinable payments and fixed maturity that the management has the positive intention and ability to hold to maturity are classified as held to maturity. Investments in Murabaha contracts and Sukuk are classified as Held to Maturity Investments are initially recognized at fair value including direct and incremental transaction cost. Subsequent to initial measurement these are measured at amortised cost less impairment losses, if any. Investments in Mutual Funds are classified as held for trading investments and are initially recognised at cost, being the fair value of consideration given. After initial recognition investments in mutual funds are valued at the unit price prevailing on the last valuation day of the period. Unrealised gains and losses are recognised in the statement of income. b)
Investment transaction
Investment transactions in Murabaha contracts and sukuk are accounted for as of the settlement date and investments in mutual funds are accounted for as of the trade date. 8
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 6.
SIGNIFICANT ACCOUNTING POLICIES (continued)
c)
Impairment of financial assets
An assessment is made at the balance sheet date to determine whether there is objective evidence that a specific financial asset may be impaired. If such evidence exists, any impairment loss is recognised in the statement of Income. If a financial asset is impaired, impairment is determined as follows: (i) (ii) (ii)
d)
For assets carried at fair value, impairment is the difference between cost and fair value, less any impairment loss previously recognised in the statement of income; For assets carried at cost, impairment is the difference between carrying value and the present value of future cash flows discounted at the current market rate of return for a similar financial asset; For assets carried at amortised cost, impairment is the difference between carrying amount and the present value of future cash flows discounted at the original effective commission rate. Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised where: (i) The rights to receive cash flows from the asset have expired; or (ii) The Fund has transferred its rights to receive cash flows from the asset; and (iii) Either (i) the Fund has transferred substantially all the risks and rewards of the asset, or (ii) the Fund has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Fund has transferred its rights to receive cash flows from an asset, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Fund’s continuing involvement in the asset. e)
Revenue recognition
Revenue on Murabaha contracts and Sukuk is recognised on a time-apportioned basis over the period of the contract based on the principal amounts outstanding. Increases or decreases in the difference between the cost and market value of the Fund’s investments in mutual funds at period end are recognised as unrealised gains or losses on held for trading investments in the statement of income. Realised gains and losses on held for trading investments sold are determined as difference between sales proceeds and cost determined on weighted average basis. f)
Foreign currency transactions
Transactions during the year in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the dates of the transactions. Monetary assets and liabilities that are denominated in a foreign currency are retranslated at the rate of exchange ruling at the balance sheet date. Exchange gains or losses are reflected in the statement of Income.
9
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 6.
SIGNIFICANT ACCOUNTING POLICIES (continued)
g)
Taxation/zakat
Taxation/zakat is the obligation of the unitholders and therefore, no provision for such liability is made in these financial statements. h)
Cash and cash equivalents
For the purposes of the statement of cashflows, cash and cash equivalents consist of bank balances. i)
Net asset value per unit
The net asset value per unit is calculated by dividing the net assets attributable to Unitholders included in the balance sheet by the number of units outstanding at the period end. j)
Provisions and accruals
Provisions and accruals are recognized when the Fund has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and can be measured reliably. k)
Offsetting
Financial assets and liabilities are offset and reported net in the balance sheet when there is a legally enforceable right to set off the recognized amounts and when the Fund intends to settle on a net basis, or to realize the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under accounting standards generally accepted in the Kingdom of Saudi Arabia, or for gains and losses arising from a group of similar transactions. 7.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash held in current accounts with National Commercial Bank (a related party). 8.
MANAGEMENT FEE AND OTHER EXPENSES
The Fund is managed and administered by the Fund Manager. For these services, the Fund accrues, daily a management fee, as determined by the Fund Manager, which should not be more than the maximum annual rate of 0.75% p.a. of the Fund's daily net assets as set out in the Fund’s terms and conditions. The Fund Manager is also entitled to recover expenses incurred on behalf of the Fund relating to audit, custody, advisory, data processing and other similar charges. The maximum amount of such expenses that can be recovered from the Fund by the Fund Manager is restricted to 0.5% per annum of the Fund's net assets at the respective valuation days. These expenses have been recovered by the Fund Manager on an actual basis except for custody fess, which is borne by the Fund Manager. Until 23 July 2016, the Fund Manager was allocated units against settlement of the management fee and other expenses on every valuation day, which were reinvested in the Fund. Subsequent to this date these expenses are settled in cash. 10
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 9.
INVESTMENTS
i)
Held to maturity investments
Held to maturity investments comprises of the following: 30 June 2017 Investment in Murabaha contracts (note 9 (i) (a)) Investment in Sukuks (note 9 (i) (b))
a)
204,196 55,368 259,564
31 December 2016 203,028 51,305 254,333
30 June 2016 250,564 31,877 282,441
Investment in Murabaha contracts comprises of the following Murabaha: % of total Value
Cost
Carrying value
National Bank of Kuwait Emirates NBD Masraf Al Rayan Saudi Investment Bank Bank Al Jazira Commercial Bank International Gulf International Bank Qatar Islamic Bank National Commercial Bank (a related party) Khaleeji Commercial Bank Saudi American Bank
20.88 17.39 7.31 5.09 4.92 4.54 4.52 3.78 3.70 3.12 1.12
55,750 46,250 19,450 13,600 13,100 12,100 12,000 10,100 9,750 8,300 3,000
55,828 46,485 19,551 13,608 13,149 12,137 12,077 10,120 9,894 8,347 3,000
30 June 2017 (Unaudited)
76.37
203,400
204,196
31 December 2016 (Audited)
77.71
201,970
203,028
30 June 2016 (Unaudited)
84.17
249,590
250,564
Murabaha contracts as at 30 June 2017 carry profit ranging from 1% to 2.7% (June 2016: 1% to 2.5%) and have maturities ranging from 1 to 9 months (June 2016: 1 to 12 months) from period end.
11
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 9.
INVESTMENTS (continued)
i)
Held to maturity investments (continued)
b)
Investment in Sukuks comprises of the following Sukuks: % of total Value
3.6 3.76 4.21 3.47
3.86 2.33 2.00 1.95
10,285 6,186 5,348 5,200
10,316 6,231 5,341 5,211
Semi-annually Semi-annually Semi-annually Semi-annually
3.95 4 3.86 3.66 3.08 6.4 3.86 2.92 6.27 5.62
1.69 1.59 1.51 1.14 1.13 0.82 0.77 0.75 0.59 0.58
4,514 4,240 4,035 3,008 2,985 2,181 2,054 1,993 1,593 1,538
4,527 4,247 4,041 3,046 3,014 2,204 2,054 1,997 1,575 1,564
Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually
30 June 2017 (Unaudited)
20.71
55,158
55,368
31 December 2016 (Audited)
19.58
51,295
51,305
30 June 2016 (Unaudited)
10.60
31,904
31,877
Cost
Carrying value
Profit Payment Frequency
Coupon rate % Investment in Sukuks Floating rate Sukuks Dubai Islamic Bank Sharjah Sukuk Ltd Saudi Electricity Global Saudi Electricity Global Turkiey Finans Katilim Bankasi A.S. (a related party) Saudi Electricity Global Unity 1 Sukuk Limited Dubai Islamic Bank SIB Sukuk Co Ltd EMAAR Unity 1 Sukuk Limited Dubai Islamic Bank CBB International Sukuk CBB International Sukuk
ii)
Held for trading investments % of Value
Cost
Value
Investment in mutual fund - held for trading Al-Ahli International Trade Fund (3,058,012 Units) (a related party)
2.92
7,683
7,812
30 June 2017 (Unaudited)
2.92
7,683
7,812
31 December 2016 (Audited)
2.71
6,982
7,065
30 June 2016 (Unaudited)
5.23
15,460
15,567
12
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 9.
INVESTMENTS (continued)
The expected maturity profile of the above held to maturity and held for trading investments is as follows: Up to 6 months
6 months – 1 year
1-3 years
3-5 years
No fixed maturity
Over 5 -years
Total
Investment in Murabaha contracts
171,321
32,875
--
--
--
--
204,196
Investment in Sukuk
--
4,527
5,775
27,812
17,254
--
55,368
Al-Ahli International Trade Fund
--
--
--
--
--
7,812
7,812
30 June 2017 (Unaudited)
171,321
37,402
5,775
27,812
17,254
7,812
267,376
31 December 2016 (Audited)
196,673
11,815
6,097
17,284
22,464
7,065
261,398
30 June 2016 (Unaudited)
235,566
42,058
4,505
--
--
15,567
297,696
10.
UNIT TRANSACTIONS
Transactions in units during the period are summarised as follows: For the sixmonths period ended 30 June 2017 Units ‘000
For the sixmonths period ended 30 June 2016 Units ‘000
206,986
195,536
45,589
117,375
Units reinvested
--
875
Units redeemed
(39,697)
(76,450)
5,892
41,800
212,878
237,336
Units at the beginning of the period (audited) Units sold
Net increase in units Units at the end of the period (unaudited)
As at 30 June 2017, top five unitholders represented 36.27% (30 June 2016: 45.79%) of the Fund’s units. 13
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 11.
RELATED PARTY TRANSACTIONS
In the ordinary course of its activities, the Fund transacts business with related parties on the basis of approved terms and conditions of the Fund. All related party transactions are approved by the Fund Board. Name of entity
Relationship
NCB Capital Company National Commercial Bank (NCB) Al Ahli Takaful Company Al-Ahli Multi-Asset Conservative Fund Al-Ahli Multi-Asset Moderate Fund Al-Ahli Multi-Asset Growth Fund Al-Ahli Multi-Asset Income Plus Fund Al-Ahli US Dollar Sukuk Fund
Fund Manager Shareholder of Fund Manager Associate of NCB Unitholder Unitholder Unitholder Unitholder Unitholder
In addition to the below disclosure, balances with related parties are also disclosed in note 7 and 9. The significant related party transactions entered into by the Fund during the period and balances resulting from such transactions are as follows: Value of units held as at 30 June 2017 2016
Related party
Nature of transaction
NCBC
Management fee
921
1,066
Expenses paid on behalf of the fund
24
30
Subscription of units
5,800
7,700
Redemption of units
4,860
3,200
Al-Ahli Multi- Subscription of units Asset Moderate Fund Redemption of units
4,300
1,800
2,500
4,200
Al-Ahli MultiAsset Growth Fund
Subscription of units
--
1,000
Redemption of units
--
--
Al-Ahli MultiAsset Income Plus Fund
Subscription of units
6,313
3,466
Redemption of units
1,500
--
Al-Ahli MultiAsset Conservative Fund
Amount of transactions 2017 2016
14
20,243
49,476
6,264
32,165
1,806
4,236
--
1,000
4,831
3,466
AL –AHLI DIVERSIFIED US DOLLAR FUND (FORMERLY AL –AHLI DIVERSIFIED US DOLLAR TRADE FUND) (Managed by NCB Capital Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2017 (unaudited) Expressed in US Dollars ‘000 (unless otherwise stated) 11.
RELATED PARTY TRANSACTIONS (continued)
Related party
Al Ahli US Dollar Sukuk Fund 12.
Nature of Transaction
Amount of transactions 2017 2016
Subscription of units
6,420
10
Redemption of units
6,365
3,590
Value of units held as at 30 June 2017 2016
2,041
514
LAST VALUATION DAY
The last valuation day of the period was 22 June 2017 (30 June 2016: 30 June 2016). There is no significant change in the net asset value per unit of the Fund between last valuation and 30 June 2017. 13.
APPROVAL OF THE FINANCIAL STATEMENTS
These interim financial statements were approved by the Fund Manager on Dhul Qadah 23, 1438H, corresponding to August 15, 2017.
15
