AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) Interim Condensed Financial Statements (Un-Audited) For the six month period ended 30 June 2016 together with the Review Report to the Unitholders
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED BALANCE SHEET (UN-AUDITED) As at 30 June 2016 (Amounts in USD) Notes
2016
2015
364,735 92,605,896
1,954,837 453,468,012
92,970,631
455,422,849
401,574
1,963,151
401,574
1,963,151
92,569,057
453,459,698
1,738,322.50
8,171,181.03
53.25
55.50
ASSETS Cash at bank Held for trading investments
7
Total assets LIABILITIES Accrued expenses
10
Total liabilities Net asset attributable to the Unitholders
8
Units in issue (numbers) Net asset attributable to each unit
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
1
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF INCOME (UN-AUDITED) For the six month period ended 30 June 2016 (Amounts in USD)
Notes
2016
2015
INCOME Net (loss) / gain from held for trading investments
9
(19,529,775)
14,933,691
EXPENSES Fund management fee Other expenses
10 10
(1,599,888) (10,379) (1,610,267)
(3,852,802) (7,761) (3,860,563)
(21,140,042)
11,073,128
Net (loss) / income for the period
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
2
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CASH FLOWS (UN-AUDITED) For the six month period ended 30 June 2016 (Amounts in USD) 2016
2015
(21,140,042)
11,073,128
(3,185,661) (24,325,703)
(14,622,150) (3,549,022)
352,964,278 (1,497,537) 327,141,038
13,533,804 86,851 10,071,633
548,659 (327,917,965) (327,369,306)
1,727,852 (10,115,401) (8,387,549)
(228,268)
1,684,084
Cash and cash equivalents at beginning of the period
593,003
270,753
Cash and cash equivalents at end of the period
364,735
1,954,837
CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) / income for the period Adjustments to reconcile net (loss) / income to net cash generated from operating activities: Unrealised gain on held for trading investments Changes in operating assets and liabilities Held for trading investments Accrued expenses Net cash generated from operating activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of units Payments for redemption of units Net cash used in financing activities Net (decrease) / increase in cash and cash equivalents
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
3
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO THE UNITHOLDERS (UN-AUDITED) For the six month period ended 30 June 2016 (Amounts in USD) 2016
2015
Net asset value attributable to the Unitholder at beginning of the period
441,036,503
450,774,119
Net (loss) / income for the period
(21,140,042)
11,073,128
Changes from unit transactions Issuance of units Redemption of units Net change from unit transactions
548,659 (327,876,063) (327,327,404)
1,727,852 (10,115,401) (8,387,549)
92,569,057
453,459,698
Net asset value attributable to the Unitholder at end of the period
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
4
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 1.
THE FUND AND ITS ACTIVITIES The American Stock Fund (the “Fund”) is an Equity Fund Portfolio managed through an agreement between Riyad Capital (the “Fund Manager”) and the Fund investors (the “Unitholders”). The objective of the Fund is to invest its assets partially in American Stock Fund (Foreign Fund) managed by Fidelity International (Foreign Fund Sub Manager) and partially in a diversified portfolio of US companies and to provide long term capital growth through investing in the US securities managed by the Fund Sub Manager. In dealing with the Unitholders, the Fund Manager considers the Fund as an independent accounting unit. Accordingly, the Fund’s Management prepares a separate financial statement for the Fund. The management of the Fund is the responsibility of the Fund Manager. However, in accordance with the Fund’s Agreement, the Fund Manager can delegate or assign its duties to one or more of the financial institutions in the Kingdom of Saudi Arabia and overseas. Accordingly, pursuant to an agreement, dated 3 December 2002, Fidelity International (“Foreign Fund Sub Manager)”acts as the Sub Fund Manager of the Fund and Brown Brothers Harriman( the Sub Custodian), pursuant to an agreement, dated 1 June 2002 acts as the custodian of the Fund. Saudi Arabia Monetary Agency’s approval for the establishment of the Fund was granted in its letter number 87/MA/25 dated 3, Muharram 1412H (corresponding to14 July 1991). The Fund commenced its operations on 26 May 1992.
2.
REGULATING AUTHORITY The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by Capital Market Authority (CMA) 3 Dhul Hijja 1427H (corresponding to 24 December 2006), detailing requirements for all investment funds within the Kingdom of Saudi Arabia.
3.
SUBSCRIPTION / REDEMPTION The Fund is open for subscriptions/ redemptions of units from Monday to Wednesday. The net assets value of the Fund is determined from Monday to Wednesday (each “Dealing Day”). The net assets value of the Fund for the purpose of purchase or sale of units is determined by dividing the net value of assets (fair value of Fund assets minus Fund liabilities) by the total number of outstanding fund units on the relevant Dealing Day.
5
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 4.
BASIS OF PRESENTATION
4.1 Statement of compliance These interim condensed financial statements have been prepared in accordance with generally accepted accounting standards applicable in the Kingdom of Saudi Arabia issued by the Saudi Organization of Certified Public Accountants. These interim condensed financial statements do not include all of the information required for a full set of financial statements and should be read in conjunction with the annual financial statements of the Fund for the year ended 31 December 2015. These interim condensed financial statements do not necessarily constitute an indication of the yearend financial statements. These interim condensed financial statements were approved by the Fund’s Board of Directors on 11 Dhual Qa’dah 1437H corresponding to 14 August 2016. 4.2
Basis of measurement These interim condensed financial statements have been prepared under the historical cost convention, except for the measurement of investments held for trading at fair value, using accrual basis of accounting and the going concern concept.
4.3
Functional and presentation currency These Interim Condensed Financial Statements are presented in United States Dollar (USD) which is the functional currency of the Fund. All financial information presented has been rounded to the nearest USD.
4.4
Use of estimates and judgments In the ordinary course of business, the preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
5.
SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES The significant accounting policies used in the preparation of these interim condensed financial statements are consistent with those used and disclosed in the annual financial statements of the Fund for the year ended 31 December 2015. Risk management policies are consistent with those used and disclosed in the annual financial statements of the Fund for the year ended 31 December 2015.
6
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 (Amounts in USD) 6.
FUND MANAGEMENT FEE, ADMINISTRATION AND OTHER CHARGES On daily basis, the Fund Manager charges the Fund, a management fee at the rate of 1.5 percent per annum of the Fund's net assets value. In addition, on daily basis, the Fund Manager and sub custodian charge the fund administration fees at the rate of 0.2 and 0.1 percent per annum of the Fund’s net assets value respectively. The Sub Custodian charges the Fund, custody fees at the rate of 0.1 percent per annum of the Fund’s net assets value. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit and legal fees, board compensation and other similar charges. These charges are not expected to exceed in total 0.2 percent per annum of the Fund’s net assets value.
7.
HELD FOR TRADING INVESTMENTS The Fund invests primarily in equity securities of US companies. The market value of trading investment portfolio is summarized as follows:
Investments in Foreign Fund managed by Sub Fund Manager Investment in other US securities managed by Fund Manager
2016
2015
92,605,896 92,605,896
447,027,144 6,440,868 453,468,012
7.1
The cost of above held for trading investment portfolio amounted to USD 89.42 million (30 June 2015: USD 438.84 million).
8.
UNIT TRANSACTIONS Transactions in units for the period are summarized as follows: (Units in numbers) 2015 2016 Units at beginning of the period Units issued Units redeemed Net change in units Units at end of the period
7
8,156,004.08
8,320,629.72
10,488.95 (6,428,170.53) (6,417,681.58) 1,738,322.50
31,516.15 (180,964.84) (149,448.69) 8,171,181.03
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 (Amounts in USD) 9.
NET (LOSS) / GAIN FROM HELD FOR TRADING INVESTMENTS
Realised (loss) / gain on sale of held for trading investments Unrealised gain on revaluation of held for trading investments
10.
2016
2015
(22,715,436) 3,185,661 (19,529,775)
311,541 14,622,150 14,933,691
TRANSACTION WITH RELATED PARTIES Related parties of the Fund include “Riyad Capital” being the Fund Manager and Riyad Bank (being the shareholder of Riyad Capital). In the ordinary course of its activities, the Fund transacts business with related parties. The related parties transactions are governed by limits set by the regulations issued by the CMA. All related party transactions are approved by the Fund Board of directors. Riyad Bank acts as a banker of the Fund and as at 30 June 2016 USD 364,735 (30 June 2015: USD 1,954,837) were held in current account of the fund maintained with Riyad Bank. The significant related party transactions entered into by the Fund during the period and the balances resulting from such transactions are as follows: Related party
Riyad Capital
Nature of transactions
Amount of transaction during the period
Closing balance Payable
2016
2015
2016
2015
Fund management fee
(1,599,888)
(3,852,802)
396,355
1,732,635
Expenses incurred on behalf of the Fund
(10,379)
(7,761)
5,219
230,516
8
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 (Amounts in USD) 11.
FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments comprise financial assets and financial liabilities. The Fund’s financial assets consist of cash at bank and held for trading investments and financial liabilities consist of accrued expenses. Held for trading investment are carried at fair value. The fair values of other financial assets and liabilities are not materially different from their carrying values.
12.
LAST VALUATION DAY The last valuation day of the period was 29 June 2016 (30 June 2015: 30 June 2015).
9
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED BALANCE SHEET (UN-AUDITED) As at 30 June 2016 (Amounts in USD) Notes
2016
2015
364,735 92,605,896
1,954,837 453,468,012
92,970,631
455,422,849
401,574
1,963,151
401,574
1,963,151
92,569,057
453,459,698
1,738,322.50
8,171,181.03
53.25
55.50
ASSETS Cash at bank Held for trading investments
7
Total assets LIABILITIES Accrued expenses
10
Total liabilities Net asset attributable to the Unitholders
8
Units in issue (numbers) Net asset attributable to each unit
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
1
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF INCOME (UN-AUDITED) For the six month period ended 30 June 2016 (Amounts in USD)
Notes
2016
2015
INCOME Net (loss) / gain from held for trading investments
9
(19,529,775)
14,933,691
EXPENSES Fund management fee Other expenses
10 10
(1,599,888) (10,379) (1,610,267)
(3,852,802) (7,761) (3,860,563)
(21,140,042)
11,073,128
Net (loss) / income for the period
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
2
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CASH FLOWS (UN-AUDITED) For the six month period ended 30 June 2016 (Amounts in USD) 2016
2015
(21,140,042)
11,073,128
(3,185,661) (24,325,703)
(14,622,150) (3,549,022)
352,964,278 (1,497,537) 327,141,038
13,533,804 86,851 10,071,633
548,659 (327,917,965) (327,369,306)
1,727,852 (10,115,401) (8,387,549)
(228,268)
1,684,084
Cash and cash equivalents at beginning of the period
593,003
270,753
Cash and cash equivalents at end of the period
364,735
1,954,837
CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) / income for the period Adjustments to reconcile net (loss) / income to net cash generated from operating activities: Unrealised gain on held for trading investments Changes in operating assets and liabilities Held for trading investments Accrued expenses Net cash generated from operating activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of units Payments for redemption of units Net cash used in financing activities Net (decrease) / increase in cash and cash equivalents
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
3
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO THE UNITHOLDERS (UN-AUDITED) For the six month period ended 30 June 2016 (Amounts in USD) 2016
2015
Net asset value attributable to the Unitholder at beginning of the period
441,036,503
450,774,119
Net (loss) / income for the period
(21,140,042)
11,073,128
Changes from unit transactions Issuance of units Redemption of units Net change from unit transactions
548,659 (327,876,063) (327,327,404)
1,727,852 (10,115,401) (8,387,549)
92,569,057
453,459,698
Net asset value attributable to the Unitholder at end of the period
The accompanying notes 1 to 12 form an integral part of these interim condensed financial statements.
4
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 1.
THE FUND AND ITS ACTIVITIES The American Stock Fund (the “Fund”) is an Equity Fund Portfolio managed through an agreement between Riyad Capital (the “Fund Manager”) and the Fund investors (the “Unitholders”). The objective of the Fund is to invest its assets partially in American Stock Fund (Foreign Fund) managed by Fidelity International (Foreign Fund Sub Manager) and partially in a diversified portfolio of US companies and to provide long term capital growth through investing in the US securities managed by the Fund Sub Manager. In dealing with the Unitholders, the Fund Manager considers the Fund as an independent accounting unit. Accordingly, the Fund’s Management prepares a separate financial statement for the Fund. The management of the Fund is the responsibility of the Fund Manager. However, in accordance with the Fund’s Agreement, the Fund Manager can delegate or assign its duties to one or more of the financial institutions in the Kingdom of Saudi Arabia and overseas. Accordingly, pursuant to an agreement, dated 3 December 2002, Fidelity International (“Foreign Fund Sub Manager)”acts as the Sub Fund Manager of the Fund and Brown Brothers Harriman( the Sub Custodian), pursuant to an agreement, dated 1 June 2002 acts as the custodian of the Fund. Saudi Arabia Monetary Agency’s approval for the establishment of the Fund was granted in its letter number 87/MA/25 dated 3, Muharram 1412H (corresponding to14 July 1991). The Fund commenced its operations on 26 May 1992.
2.
REGULATING AUTHORITY The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by Capital Market Authority (CMA) 3 Dhul Hijja 1427H (corresponding to 24 December 2006), detailing requirements for all investment funds within the Kingdom of Saudi Arabia.
3.
SUBSCRIPTION / REDEMPTION The Fund is open for subscriptions/ redemptions of units from Monday to Wednesday. The net assets value of the Fund is determined from Monday to Wednesday (each “Dealing Day”). The net assets value of the Fund for the purpose of purchase or sale of units is determined by dividing the net value of assets (fair value of Fund assets minus Fund liabilities) by the total number of outstanding fund units on the relevant Dealing Day.
5
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 4.
BASIS OF PRESENTATION
4.1 Statement of compliance These interim condensed financial statements have been prepared in accordance with generally accepted accounting standards applicable in the Kingdom of Saudi Arabia issued by the Saudi Organization of Certified Public Accountants. These interim condensed financial statements do not include all of the information required for a full set of financial statements and should be read in conjunction with the annual financial statements of the Fund for the year ended 31 December 2015. These interim condensed financial statements do not necessarily constitute an indication of the yearend financial statements. These interim condensed financial statements were approved by the Fund’s Board of Directors on 11 Dhual Qa’dah 1437H corresponding to 14 August 2016. 4.2
Basis of measurement These interim condensed financial statements have been prepared under the historical cost convention, except for the measurement of investments held for trading at fair value, using accrual basis of accounting and the going concern concept.
4.3
Functional and presentation currency These Interim Condensed Financial Statements are presented in United States Dollar (USD) which is the functional currency of the Fund. All financial information presented has been rounded to the nearest USD.
4.4
Use of estimates and judgments In the ordinary course of business, the preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
5.
SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES The significant accounting policies used in the preparation of these interim condensed financial statements are consistent with those used and disclosed in the annual financial statements of the Fund for the year ended 31 December 2015. Risk management policies are consistent with those used and disclosed in the annual financial statements of the Fund for the year ended 31 December 2015.
6
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 (Amounts in USD) 6.
FUND MANAGEMENT FEE, ADMINISTRATION AND OTHER CHARGES On daily basis, the Fund Manager charges the Fund, a management fee at the rate of 1.5 percent per annum of the Fund's net assets value. In addition, on daily basis, the Fund Manager and sub custodian charge the fund administration fees at the rate of 0.2 and 0.1 percent per annum of the Fund’s net assets value respectively. The Sub Custodian charges the Fund, custody fees at the rate of 0.1 percent per annum of the Fund’s net assets value. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit and legal fees, board compensation and other similar charges. These charges are not expected to exceed in total 0.2 percent per annum of the Fund’s net assets value.
7.
HELD FOR TRADING INVESTMENTS The Fund invests primarily in equity securities of US companies. The market value of trading investment portfolio is summarized as follows:
Investments in Foreign Fund managed by Sub Fund Manager Investment in other US securities managed by Fund Manager
2016
2015
92,605,896 92,605,896
447,027,144 6,440,868 453,468,012
7.1
The cost of above held for trading investment portfolio amounted to USD 89.42 million (30 June 2015: USD 438.84 million).
8.
UNIT TRANSACTIONS Transactions in units for the period are summarized as follows: (Units in numbers) 2015 2016 Units at beginning of the period Units issued Units redeemed Net change in units Units at end of the period
7
8,156,004.08
8,320,629.72
10,488.95 (6,428,170.53) (6,417,681.58) 1,738,322.50
31,516.15 (180,964.84) (149,448.69) 8,171,181.03
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 (Amounts in USD) 9.
NET (LOSS) / GAIN FROM HELD FOR TRADING INVESTMENTS
Realised (loss) / gain on sale of held for trading investments Unrealised gain on revaluation of held for trading investments
10.
2016
2015
(22,715,436) 3,185,661 (19,529,775)
311,541 14,622,150 14,933,691
TRANSACTION WITH RELATED PARTIES Related parties of the Fund include “Riyad Capital” being the Fund Manager and Riyad Bank (being the shareholder of Riyad Capital). In the ordinary course of its activities, the Fund transacts business with related parties. The related parties transactions are governed by limits set by the regulations issued by the CMA. All related party transactions are approved by the Fund Board of directors. Riyad Bank acts as a banker of the Fund and as at 30 June 2016 USD 364,735 (30 June 2015: USD 1,954,837) were held in current account of the fund maintained with Riyad Bank. The significant related party transactions entered into by the Fund during the period and the balances resulting from such transactions are as follows: Related party
Riyad Capital
Nature of transactions
Amount of transaction during the period
Closing balance Payable
2016
2015
2016
2015
Fund management fee
(1,599,888)
(3,852,802)
396,355
1,732,635
Expenses incurred on behalf of the Fund
(10,379)
(7,761)
5,219
230,516
8
AMERICAN STOCK FUND Open-Ended Fund (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS For the six month period ended 30 June 2016 (Amounts in USD) 11.
FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments comprise financial assets and financial liabilities. The Fund’s financial assets consist of cash at bank and held for trading investments and financial liabilities consist of accrued expenses. Held for trading investment are carried at fair value. The fair values of other financial assets and liabilities are not materially different from their carrying values.
12.
LAST VALUATION DAY The last valuation day of the period was 29 June 2016 (30 June 2015: 30 June 2015).
9
