AlAhli US Dollar Sukuk Fund
AlAhli US Dollar Sukuk Fund
AlAhli US Dollar Sukuk 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 92000023 Fax +966 114060049 Website: www.alahlicapital.com 2. Sub-manager / investment adviser None 3. Investment activities During the first half of 2017, the fund underweighted the duration of the benchmark with the strategy that global interest rates were low and were expected to go up driven by the United States. The first half of the year saw volatility in US interest rates as the FED hiked interest rates twice in Mar and June. 4. Fund’s performance The fund underperformed the benchmark by -1.50%. The Assets Under Management (AUM) have Increased by 0.8% and closed the period at USD 21.2 MM. 5. T&C’s Material changes The fund manager has not made any changes to the terms and conditions of the fund. 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 US Dollar Sukuk 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 US DOLLAR SUKUK 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 US DOLLAR SUKUK FUND (Managed by NCB Capital Company) INTERIM BALANCE SHEET As at 30 June 2017 Expressed in US Dollar ‘000 (unless otherwise stated)
Notes
30 June 2017 (Unaudited)
31 December 2016 (Audited)
30 June 2016 (Unaudited)
131
75
44
ASSETS Cash and cash equivalents
6
Held to maturity investments
8 (i)
--
10,483
16,152
Available for sale investments
8 (ii)
17,401
6,695
6,129
Held for trading investments
8 (iii)
3,680
3,787
514
21,212
21,040
22,839
--
--
1
Management fee payable
13
--
--
Total liabilities
13
--
1
21,199
21,040
22,838
19,604
19,752
21,464
1.0814
1.0652
1.0640
Total assets LIABILITIES Payable to Unitholders on account of redemptions
Net assets attributable to Unitholders Units in issue in thousands (number)
9
Net assets value per unit (USD)
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 2
AL-AHLI US DOLLAR SUKUK FUND (Managed by NCB Capital Company) INTERIM STATEMENT OF INCOME (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollar ‘000 (unless otherwise stated) 30 June 2017
30 June 2016
45
166
Sukuk income
249
138
Realised (loss) / gain on available for sale investments
(30)
207
Unrealized gain / (loss) on held for trading investments
1
(155)
Other income
8
--
273
356
78
138
Audit fee
4
3
Shariah audit fee
4
3
Fund Board remuneration
2
2
CMA fee
1
1
Administrative expenses
8
8
97
155
176
201
Note INVESTMENT REVENUE Profit on Murabaha contracts
Total revenue EXPENSES
7
Management fee
Total expenses NET INCOME FOR THE PERIOD
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 3
AL-AHLI US DOLLAR SUKUK FUND (Managed by NCB Capital Company) INTERIM STATEMENT OF CASH FLOWS (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollar ‘000 (unless otherwise stated) 30 June 2017
30 June 2016
176
201
-(1) 175
155 155 511
10,483 (10,558) 108 13
8,385 1,517 7,514 --
221
17,927
1,232 -(1,397)
228 (1) (18,122)
(165)
(17,895)
Net increase in cash and cash equivalents
56
32
Cash and cash equivalents at the beginning of the period
75
12
Note Cash flow from operating activities Net income for the period Adjustment for: Non-cash expenses Unrealised (gain) / loss on held for trading investments Changes in operating assets and liabilities: Decrease in held to maturity investments (Increase) / decrease in available for sale investments Decrease in held for trading investments Increase in management fee payable Net cash provided by operating activities Cash flow from financing activities Proceeds from units sold Subscription fees Value of units redeemed Net cash used in financing activities
Cash and cash equivalents at the end of the period
6
131
44
Supplementary non cash information Unrealised gain/ (loss) on available for sale investments recorded directly in statement of changes in net assets attributable to Unitholders
8
148
(29)
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 4
AL-AHLI US DOLLAR SUKUK 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 Dollar ‘000 (unless otherwise stated) 30 June 2017
30 June 2016
21,040
40,406
Unrealised gain / (loss) on available for sale investments
148
(29)
Net income for the period
176
201
1,232
228
--
155
--
(1)
(1,397)
(18,122)
(165)
(17,740)
21,199
22,838
Notes Net assets attributable to Unitholders at the beginning of the period (audited)
Increase / (decrease) in net assets from unit transactions during the period
9
Proceeds from units sold Value of units reinvested
7
Subscription fees Value of units redeemed
Net assets attributable to Unitholders at the end of the period (unaudited)
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 5
AL-AHLI US DOLLAR SUKUK 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 Dollar ‘000 (unless otherwise stated) 1.
THE FUND AND ITS ACTIVITIES
Al-Ahli US Dollar Sukuk 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 invests in US Dollar denominated Shariah compliant Sukuks and Murabaha contracts with the primary objective of providing competitive returns to the Unitholders. The Murabaha contracts are for terms of less than a year, and usually less than 6 months. The Sukuk investments are usually for a period longer than one year, however, the Fund Manager has the right to sell the Sukuk investments in the open market before maturity to maintain certain investment portfolio ratios as described in the Fund’s Terms and Conditions. The terms and conditions of the Fund have been approved by the CMA on 19 Dhul Hijja 1430H (corresponding to 6 December 2009). The Fund commenced its activities on 9 March 2010. 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 pursuant to resolution number 7-219-2006 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.
SUBSCRIPTIONS / REDEMPTIONS
The Fund is open for subscriptions / redemptions of units on every Monday and Wednesday. 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.
6
AL-AHLI US DOLLAR SUKUK 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.
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 11). 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 and available for sale 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. 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.
7
AL-AHLI US DOLLAR SUKUK 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.
BASIS OF PREPARATION (continued)
Use of estimates and judgments (continued) Valuation of financial assets (continued) 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. 5.
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 in Murabaha contracts and Sukuk are classified as Held to Maturity Investments and are measured at cost (being the fair value of consideration given) at initial recognition. Subsequent to initial measurement these are measured at amortised cost. 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. Investments in Sukuks are classified as available for sale and are initially recognised at cost, being the fair value of consideration given (including acquisition charges associated with the investment). After initial recognition investment in Sukuks are measured at fair value. Unrealised gains or losses are reported as a separate component of the statement of changes in net assets attributable to unitholders until the Sukuk is derecognised or the Sukuk is determined to be impaired. On derecognition or impairment the cumulative gain or loss previously reported in the statement of changes in net assets attributable to unitholders is included in the statement of income for the period. 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 US DOLLAR SUKUK 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. c)
SIGNIFICANT ACCOUNTING POLICIES (continued) 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) (iii)
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: (a) (b) (c)
The rights to receive cash flows from the asset have expired; or The Fund has transferred its rights to receive cash flows from the asset; and 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. Increases or decreases in the difference between the cost and market value of Sukuks at period end are recognised as unrealised gains or losses in the statement of changes in net assets attributable to unitholders. 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 US DOLLAR SUKUK 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.
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 Fund is open for subscription and redemption of units on every Saudi business day. 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. 6.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash held in current accounts with National Commercial Bank (a related party).
10
AL-AHLI US DOLLAR SUKUK 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) 7.
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. Furthermore, the Fund Manager is entitled to a subscription fee of 2% at the time of the investment in the Fund by a Unitholder. This fee may be waived at the discretion of 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. 8.
INVESTMENTS
i)
Held to maturity investments
The held for trading investments comprises of the following: % of total investment Value
Cost
Carrying value
--
--
--
31 December 2016 (Audited)
50.01
10,400
10,483
30 June 2016 (Unaudited)
71.04
16,080
16,209
30 June 2017 (Unaudited)
Murabaha contracts as at 30 June 2017 carry profit ranging from nil (June 2016: 1.2% to 2.1%) and have maturities ranging from nil (June 2016: 1 to 9 months) from period end.
11
AL-AHLI US DOLLAR SUKUK 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) 8.
INVESTMENTS (continued)
ii)
Available for sale investments
Available for sale investments comprises of the following: % of total Investment Coupon rate % Value
Cost
Carrying value
Repayment terms
4.96 4.96 4.91 4.87 4.86 4.84 4.79 4.77 4.76 4.64 4.40 4.19 3.83 2.93 2.92 2.62 1.52 1.52 1.51 1.50 1.48 1.44 1.44 1.44 1.44
1,039 1,038 1,040 1,010 1,014 991 964 995 991 990 914 872 803 601 607 542 310 309 308 319 309 302 302 301 295
1,046 1,045 1,035 1,027 1,024 1,020 1,009 1,005 1,003 979 927 884 808 617 615 553 322 321 318 316 312 304 304 304 303
Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually
30 June 2017 (Unaudited)
82.54
17,166
17,401
31 December 2016 (Audited)
31.94
6,673
6,695
30 June 2016 (Unaudited)
26.70
6,033
6,129
Investment in Sukuks Sharjah Sukuk Ltd EMG Sukuk Ltd Saudi Electricity Global DP World Dubai UNITY 1 Sukuk Ltd Malaysia Sukuk Sharjah Islamic Bank SIB Sukuk Co Ltd DIB Sukuk Ltd JAFZ Sukuk Ltd KSA Sukuk Ltd EMAAR Sukuk Ltd KSA Sukuk Ltd DIB Sukuk Ltd Perusahaan Penerbit SBSN Wakala Global Sukuk AXIATA ICD Sukuk CBB International Sukuk CBB International Sukuk Perusahaan Penerbit SBSN Perusahaan Penerbit SBSN ICD Sukuk JANY Sukuk Malaysia Sovereign Sukuk
3.76 4.56 3.47 3.91 3.86 3.18 2.95 2.84 2.92 7.00 3.63 6.40 2.89 3.66 3.40 4.65 4.36 5.00 5.62 6.28 4.15 3.51 3.51 2.84 3.04
12
AL-AHLI US DOLLAR SUKUK 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) 8.
INVESTMENTS (continued)
ii)
Available for sale investments For the sixmonths period ended 30 June 2017
For the year ended 31 December 2016
For the sixmonths period ended 30 June 2016
Balance at the beginning of the period / year Addition / (charge) during the period / year Transferred to statement of operations during the period / year
(36) 197
68 (157)
68 (236)
(48)
53
207
Balance at the end of the period / year
113
(36)
39
iii)
Held for trading investments
Held for trading investments comprises of the following: % of total investment Value
Cost
Value
Al-Ahli Diversified US Dollar Trade Fund (409,512 units) (a related party)
9.68
2,036
2,041
Al-Ahli International Trade Fund (Nil units) (a related party)
7.77
1,636
1,639
30 June 2017 (Unaudited)
17.46
3,672
3,680
31 December 2016 (Audited)
18.05
3,778
3,787
2.26
494
514
Investment in mutual fund - held for trading
30 June 2016 (Unaudited)
13
AL-AHLI US DOLLAR SUKUK 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) 8.
INVESTMENTS (continued)
The expected maturity profile of the above held to maturity, available for sale and held for trading investments is as follows: Up to 1 month
1–6 months
6 months – 1 year
1-3 years
3-5 years
Over 5 years
No fixed maturity
Total
--
--
1,009
4,794
3,616
7,982
--
17,401
Investment in Fund of funds
--
--
--
--
--
--
3,680
3,680
30 June 2017 (Unaudited)
--
--
1,009
4,794
3,616
7,982
3,680
21,081
31 December 2016 (Audited)
4,327
7,216
--
1,319
1,979
2,337
3,787
20,965
30 June 2016 (Unaudited)
5,637
8,592
8,052
--
--
--
514
22,795
Available for sale investments Investment in Sukuk Held for trading investments
9.
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
19,752
38,163
1,153
215
Units reinvested
--
146
Units redeemed
(1,302)
(17,060)
(149)
(16,699)
19,603
21,464
Units at the beginning of the period (audited) Units sold
Net decrease in units Units at the end of the period (unaudited)
As at 30 June 2017, top five Unitholders represented 64% (30 June 2016: 53.51%) of the Fund’s units. 14
AL-AHLI US DOLLAR SUKUK 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) 10.
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)
Fund Manager Shareholder of Fund Manager
In addition to the below disclosure, balances with related parties are also disclosed in note 6 and 8.
Related party
Nature of transaction
NCBC
Management fee
78
138
Expenses paid on behalf of the fund
19
17
11.
Amount of transactions 2017 2016
Value of units held as at 30 June 2017 2016
--
--
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. 12.
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 US Dollar Sukuk 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 92000023 Fax +966 114060049 Website: www.alahlicapital.com 2. Sub-manager / investment adviser None 3. Investment activities During the first half of 2017, the fund underweighted the duration of the benchmark with the strategy that global interest rates were low and were expected to go up driven by the United States. The first half of the year saw volatility in US interest rates as the FED hiked interest rates twice in Mar and June. 4. Fund’s performance The fund underperformed the benchmark by -1.50%. The Assets Under Management (AUM) have Increased by 0.8% and closed the period at USD 21.2 MM. 5. T&C’s Material changes The fund manager has not made any changes to the terms and conditions of the fund. 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 US Dollar Sukuk 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 US DOLLAR SUKUK 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 US DOLLAR SUKUK FUND (Managed by NCB Capital Company) INTERIM BALANCE SHEET As at 30 June 2017 Expressed in US Dollar ‘000 (unless otherwise stated)
Notes
30 June 2017 (Unaudited)
31 December 2016 (Audited)
30 June 2016 (Unaudited)
131
75
44
ASSETS Cash and cash equivalents
6
Held to maturity investments
8 (i)
--
10,483
16,152
Available for sale investments
8 (ii)
17,401
6,695
6,129
Held for trading investments
8 (iii)
3,680
3,787
514
21,212
21,040
22,839
--
--
1
Management fee payable
13
--
--
Total liabilities
13
--
1
21,199
21,040
22,838
19,604
19,752
21,464
1.0814
1.0652
1.0640
Total assets LIABILITIES Payable to Unitholders on account of redemptions
Net assets attributable to Unitholders Units in issue in thousands (number)
9
Net assets value per unit (USD)
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 2
AL-AHLI US DOLLAR SUKUK FUND (Managed by NCB Capital Company) INTERIM STATEMENT OF INCOME (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollar ‘000 (unless otherwise stated) 30 June 2017
30 June 2016
45
166
Sukuk income
249
138
Realised (loss) / gain on available for sale investments
(30)
207
Unrealized gain / (loss) on held for trading investments
1
(155)
Other income
8
--
273
356
78
138
Audit fee
4
3
Shariah audit fee
4
3
Fund Board remuneration
2
2
CMA fee
1
1
Administrative expenses
8
8
97
155
176
201
Note INVESTMENT REVENUE Profit on Murabaha contracts
Total revenue EXPENSES
7
Management fee
Total expenses NET INCOME FOR THE PERIOD
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 3
AL-AHLI US DOLLAR SUKUK FUND (Managed by NCB Capital Company) INTERIM STATEMENT OF CASH FLOWS (unaudited) For the six months period ended 30 June 2017 Expressed in US Dollar ‘000 (unless otherwise stated) 30 June 2017
30 June 2016
176
201
-(1) 175
155 155 511
10,483 (10,558) 108 13
8,385 1,517 7,514 --
221
17,927
1,232 -(1,397)
228 (1) (18,122)
(165)
(17,895)
Net increase in cash and cash equivalents
56
32
Cash and cash equivalents at the beginning of the period
75
12
Note Cash flow from operating activities Net income for the period Adjustment for: Non-cash expenses Unrealised (gain) / loss on held for trading investments Changes in operating assets and liabilities: Decrease in held to maturity investments (Increase) / decrease in available for sale investments Decrease in held for trading investments Increase in management fee payable Net cash provided by operating activities Cash flow from financing activities Proceeds from units sold Subscription fees Value of units redeemed Net cash used in financing activities
Cash and cash equivalents at the end of the period
6
131
44
Supplementary non cash information Unrealised gain/ (loss) on available for sale investments recorded directly in statement of changes in net assets attributable to Unitholders
8
148
(29)
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 4
AL-AHLI US DOLLAR SUKUK 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 Dollar ‘000 (unless otherwise stated) 30 June 2017
30 June 2016
21,040
40,406
Unrealised gain / (loss) on available for sale investments
148
(29)
Net income for the period
176
201
1,232
228
--
155
--
(1)
(1,397)
(18,122)
(165)
(17,740)
21,199
22,838
Notes Net assets attributable to Unitholders at the beginning of the period (audited)
Increase / (decrease) in net assets from unit transactions during the period
9
Proceeds from units sold Value of units reinvested
7
Subscription fees Value of units redeemed
Net assets attributable to Unitholders at the end of the period (unaudited)
The accompanying notes 1 to 12 form an integral part of these interim financial statements. 5
AL-AHLI US DOLLAR SUKUK 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 Dollar ‘000 (unless otherwise stated) 1.
THE FUND AND ITS ACTIVITIES
Al-Ahli US Dollar Sukuk 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 invests in US Dollar denominated Shariah compliant Sukuks and Murabaha contracts with the primary objective of providing competitive returns to the Unitholders. The Murabaha contracts are for terms of less than a year, and usually less than 6 months. The Sukuk investments are usually for a period longer than one year, however, the Fund Manager has the right to sell the Sukuk investments in the open market before maturity to maintain certain investment portfolio ratios as described in the Fund’s Terms and Conditions. The terms and conditions of the Fund have been approved by the CMA on 19 Dhul Hijja 1430H (corresponding to 6 December 2009). The Fund commenced its activities on 9 March 2010. 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 pursuant to resolution number 7-219-2006 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.
SUBSCRIPTIONS / REDEMPTIONS
The Fund is open for subscriptions / redemptions of units on every Monday and Wednesday. 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.
6
AL-AHLI US DOLLAR SUKUK 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.
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 11). 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 and available for sale 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. 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.
7
AL-AHLI US DOLLAR SUKUK 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.
BASIS OF PREPARATION (continued)
Use of estimates and judgments (continued) Valuation of financial assets (continued) 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. 5.
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 in Murabaha contracts and Sukuk are classified as Held to Maturity Investments and are measured at cost (being the fair value of consideration given) at initial recognition. Subsequent to initial measurement these are measured at amortised cost. 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. Investments in Sukuks are classified as available for sale and are initially recognised at cost, being the fair value of consideration given (including acquisition charges associated with the investment). After initial recognition investment in Sukuks are measured at fair value. Unrealised gains or losses are reported as a separate component of the statement of changes in net assets attributable to unitholders until the Sukuk is derecognised or the Sukuk is determined to be impaired. On derecognition or impairment the cumulative gain or loss previously reported in the statement of changes in net assets attributable to unitholders is included in the statement of income for the period. 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 US DOLLAR SUKUK 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. c)
SIGNIFICANT ACCOUNTING POLICIES (continued) 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) (iii)
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: (a) (b) (c)
The rights to receive cash flows from the asset have expired; or The Fund has transferred its rights to receive cash flows from the asset; and 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. Increases or decreases in the difference between the cost and market value of Sukuks at period end are recognised as unrealised gains or losses in the statement of changes in net assets attributable to unitholders. 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 US DOLLAR SUKUK 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.
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 Fund is open for subscription and redemption of units on every Saudi business day. 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. 6.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash held in current accounts with National Commercial Bank (a related party).
10
AL-AHLI US DOLLAR SUKUK 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) 7.
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. Furthermore, the Fund Manager is entitled to a subscription fee of 2% at the time of the investment in the Fund by a Unitholder. This fee may be waived at the discretion of 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. 8.
INVESTMENTS
i)
Held to maturity investments
The held for trading investments comprises of the following: % of total investment Value
Cost
Carrying value
--
--
--
31 December 2016 (Audited)
50.01
10,400
10,483
30 June 2016 (Unaudited)
71.04
16,080
16,209
30 June 2017 (Unaudited)
Murabaha contracts as at 30 June 2017 carry profit ranging from nil (June 2016: 1.2% to 2.1%) and have maturities ranging from nil (June 2016: 1 to 9 months) from period end.
11
AL-AHLI US DOLLAR SUKUK 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) 8.
INVESTMENTS (continued)
ii)
Available for sale investments
Available for sale investments comprises of the following: % of total Investment Coupon rate % Value
Cost
Carrying value
Repayment terms
4.96 4.96 4.91 4.87 4.86 4.84 4.79 4.77 4.76 4.64 4.40 4.19 3.83 2.93 2.92 2.62 1.52 1.52 1.51 1.50 1.48 1.44 1.44 1.44 1.44
1,039 1,038 1,040 1,010 1,014 991 964 995 991 990 914 872 803 601 607 542 310 309 308 319 309 302 302 301 295
1,046 1,045 1,035 1,027 1,024 1,020 1,009 1,005 1,003 979 927 884 808 617 615 553 322 321 318 316 312 304 304 304 303
Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually Semi-annually
30 June 2017 (Unaudited)
82.54
17,166
17,401
31 December 2016 (Audited)
31.94
6,673
6,695
30 June 2016 (Unaudited)
26.70
6,033
6,129
Investment in Sukuks Sharjah Sukuk Ltd EMG Sukuk Ltd Saudi Electricity Global DP World Dubai UNITY 1 Sukuk Ltd Malaysia Sukuk Sharjah Islamic Bank SIB Sukuk Co Ltd DIB Sukuk Ltd JAFZ Sukuk Ltd KSA Sukuk Ltd EMAAR Sukuk Ltd KSA Sukuk Ltd DIB Sukuk Ltd Perusahaan Penerbit SBSN Wakala Global Sukuk AXIATA ICD Sukuk CBB International Sukuk CBB International Sukuk Perusahaan Penerbit SBSN Perusahaan Penerbit SBSN ICD Sukuk JANY Sukuk Malaysia Sovereign Sukuk
3.76 4.56 3.47 3.91 3.86 3.18 2.95 2.84 2.92 7.00 3.63 6.40 2.89 3.66 3.40 4.65 4.36 5.00 5.62 6.28 4.15 3.51 3.51 2.84 3.04
12
AL-AHLI US DOLLAR SUKUK 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) 8.
INVESTMENTS (continued)
ii)
Available for sale investments For the sixmonths period ended 30 June 2017
For the year ended 31 December 2016
For the sixmonths period ended 30 June 2016
Balance at the beginning of the period / year Addition / (charge) during the period / year Transferred to statement of operations during the period / year
(36) 197
68 (157)
68 (236)
(48)
53
207
Balance at the end of the period / year
113
(36)
39
iii)
Held for trading investments
Held for trading investments comprises of the following: % of total investment Value
Cost
Value
Al-Ahli Diversified US Dollar Trade Fund (409,512 units) (a related party)
9.68
2,036
2,041
Al-Ahli International Trade Fund (Nil units) (a related party)
7.77
1,636
1,639
30 June 2017 (Unaudited)
17.46
3,672
3,680
31 December 2016 (Audited)
18.05
3,778
3,787
2.26
494
514
Investment in mutual fund - held for trading
30 June 2016 (Unaudited)
13
AL-AHLI US DOLLAR SUKUK 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) 8.
INVESTMENTS (continued)
The expected maturity profile of the above held to maturity, available for sale and held for trading investments is as follows: Up to 1 month
1–6 months
6 months – 1 year
1-3 years
3-5 years
Over 5 years
No fixed maturity
Total
--
--
1,009
4,794
3,616
7,982
--
17,401
Investment in Fund of funds
--
--
--
--
--
--
3,680
3,680
30 June 2017 (Unaudited)
--
--
1,009
4,794
3,616
7,982
3,680
21,081
31 December 2016 (Audited)
4,327
7,216
--
1,319
1,979
2,337
3,787
20,965
30 June 2016 (Unaudited)
5,637
8,592
8,052
--
--
--
514
22,795
Available for sale investments Investment in Sukuk Held for trading investments
9.
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
19,752
38,163
1,153
215
Units reinvested
--
146
Units redeemed
(1,302)
(17,060)
(149)
(16,699)
19,603
21,464
Units at the beginning of the period (audited) Units sold
Net decrease in units Units at the end of the period (unaudited)
As at 30 June 2017, top five Unitholders represented 64% (30 June 2016: 53.51%) of the Fund’s units. 14
AL-AHLI US DOLLAR SUKUK 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) 10.
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)
Fund Manager Shareholder of Fund Manager
In addition to the below disclosure, balances with related parties are also disclosed in note 6 and 8.
Related party
Nature of transaction
NCBC
Management fee
78
138
Expenses paid on behalf of the fund
19
17
11.
Amount of transactions 2017 2016
Value of units held as at 30 June 2017 2016
--
--
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. 12.
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
