SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open Ended ...
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) Interim Condensed Financial Statements (Un-Audited) For the six months period ended 30 June 2016 together with the Review Report to the Unitholders
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED BALANCE SHEET (UN-AUDITED) As at 30 June 2016 (Amounts in SAR) Note
2016
2015
8,657,423 2,513 69,477,846
18,231,471 -161,653,934
78,137,782
179,885,405
115,355 23,278 138,633 77,999,149
285,128 23,287 308,415 179,576,990
10,658,168
18,099,599
7.3183
9.9216
ASSETS Cash and cash equivalents Prepaid Expenses Investments held for trading
7 8
Total assets LIABILITIES Fund management fee payable Accrued expenses Total liabilities Net asset attributable to the Unitholders
6, 11
Units in issue (numbers) Net asset value - per unit
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements. The interim condensed financial statements appearing from page 1 to 9 were approved by the Fund Manager (as per the terms and conditions of the Fund) on 14th August 2016.
1
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED STATEMENT OF INCOME (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR)
2016
2015
9
(3,031,296) 1,224,653 (1,806,643)
31,656,306 2,271,237 33,927,543
6, 11 10
(751,310) (26,368) (777,678) (2,584,321)
(1,765,750) (23,287) (1,789,037) 32,138,506
Note INCOME Trading (loss) / gain - net Dividend income EXPENSES Fund management fee Other expenses Net (loss) / income for the period
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements.
2
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED STATEMENT OF CASH FLOWS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 2016
2015
(2,584,321)
32,138,506
9,458,085 (6,426,789) 446,975
(9,977,302) (21,679,004) 482,200
(81,307,361) 77,265,611 (2,513) (35,728) (30,908) (3,663,924)
(198,506,946) 267,222,389 -(26,893) (12,902) 69,157,848
Proceeds from issuance of units Payments for redemption of units Cash Distribution Net cash used in from financing activities
3,234,943 (19,440,515) (2,100,885) (18,306,457)
21,939,683 (71,933,226) (5,240,847) (55,234,390)
Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
(21,970,381) 30,627,804 8,657,423
13,923,458 4,308,013 18,231,471
CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) / income for the period Adjustments to reconcile net income to net cash (used in) / generated from operating activities: Realised loss / (gain) on investments held for trading Unrealised gain on investments held for trading Changes in operating assets and liabilities Investments held for trading Dividend receivable Prepaid Expenses Fund management fee payable Accrued expenses Net cash (used in) / generated from operating activities CASH FLOWS FROM FINANCING ACTIVITIES
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements.
3
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO THE UNITHOLDERS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 2016
2015
Net asset attributable to the Unitholders at the beginning of the period
98,889,927
202,672,874
Net (loss) / income for the period
(2,584,321)
32,138,506
3,234,943 (19,440,515) (16,205,572)
21,939,683 (71,933,226) (49,993,543)
Cash Distribution
(2,100,885)
(5,240,847)
Net asset attributable to the Unitholders at the end of the period
77,999,149
179,576,990
Changes from unit transactions Proceeds from issuance of units Payments for redemption of units Net changes from unit transactions
Transactions in units for the period are summarized as follows: (In numbers)
Units at the beginning of the period Units issued Units redeemed
12,879,485 472,301 (2,693,618)
23,273,853 2,253,142 (7,427,396)
Net change in units
(2,221,317)
(5,174,254)
Units at the end of the period
10,658,168
18,099,599
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements.
4
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016 1.
THE FUND AND ITS ACTIVITIES Saudi Fransi Saudi Equity Income Fund (the Fund) is an open ended Saudi Riyal denominated investment fund based on an agreement between Saudi Fransi Capital (the ‘Fund Manager’) and investors (the ‘Unitholders’). The Fund commenced its operations on 20 February 2014. The objective of the Fund is to provide medium to long term growth by investing in listed companies in the Saudi Arabian Equity Market. The Fund will only invest in companies that fulfill Shariah Board Criteria. The Fund also aims to make a half yearly cash distribution to its unitholders considering two options, whichever is higher. 2.5% of unit price (NAV), regardless of the Fund’s performance or if the Fund’s unit price (NAV) on the record day achieves a new high (since the Fund’s inception) compared to the unit prices (NAV) registered in the previous record day, then the Fund will distribute 50% of the increase from the previous unit price (NAV) at the previous record day. The Fund updated its terms and conditions which were approved by the Capital Market Authority (CMA) on 24 Sha’aban 1436H (corresponding to 11 June 2015). The Fund Manager and Custodian of the Fund is Saudi Fransi Capital.
2.
REGULATORY AUTHORITY The Fund is governed by the Investment Fund Regulations (“the Regulations”) published by the Capital Market Authority (CMA) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006), detailing requirements for all investment funds within the Kingdom of Saudi Arabia.
3.
SUBSCRIPTION / REDEMPTION OF UNITS The Fund is open for subscriptions / redemptions with a cutoff time of 12:00 pm on Sunday, Tuesday and Wednesday. The net asset attributable to the Unitholders of the Fund’s portfolio is determined on Monday, Wednesday and Thursday (each a “Dealing day”). The net asset attributable to the Unitholders of the Fund for the purpose of subscription/ redemption of units is determined by dividing the net asset attributable to the Unitholders of the Fund (fair value of the Fund’s assets minus the Fund’s liabilities) by the total number of the Fund’s units outstanding on the relevant dealing day.
4.
BASIS OF PREPARATION
4.1
Statement of compliance These interim condensed financial statements have been presented in accordance with the requirements of the accounting standards on financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). These interim condensed financial statements have been presented in condensed form and did not include all the information presented in annual financial statements of the Fund; therefore, these interim condensed financial statements 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 does not necessarily constitute an indication of the year-end financial results. Certain prior period figures have been reclassified to conform with the current period presentation.
5
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 4.
BASIS OF PREPARATION (CONTINUED)
4.2
Basis of measurement These interim condensed financial statements have been prepared under the historical cost convention using the accrual basis of accounting and the going concern concept, except for the measurement of investments held for trading at fair value.
4.3
Functional and presentation currency These interim condensed financial statements are presented in Saudi Arabian Riyals (SAR), which is the also functional currency of the Fund. All financial information presented has been rounded to the nearest SAR.
4.4
Use of estimates and judgments In the ordinary course of business, the preparation of the 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 on a prospective basis.
5.
SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT POLICIES The significant accounting policies used in the preparation of these interim condensed financial statements and the risk management policies are consistent with those used and disclosed in the annual financial statements for the period ended 31 December 2015.
6.
MANAGEMENT FEE AND OTHER CHARGES The Fund pays management fee calculated at an annual rate of 1.75 percent for the net asset value. This is accrued daily and paid on monthly basis. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit fee, board compensation and other similar charges. Subscription fee up to 3 percent of the invested amount is adjusted by deduction from the gross subscription, hence, it does not impact or reflect in the financial statements of the Fund.
7.
CASH AND CASH EQUIVALENTS
Cash at bank Cash at brokerage investment account
6
2016
2015
253,243 8,404,180 8,657,423
11,913 18,219,558 18,231,471
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 8.
INVESTMENTS HELD FOR TRADING The sector-wise composition of investment held for trading is summarized as follows: Cost
Market value
% of market value
11,451,212 7,550,217 7,721,518 7,197,390 7,653,380 6,318,841 4,908,728 7,519,309 3,809,871 3,621,456 2,702,751
10,289,251 8,606,212 8,395,328 8,299,305 8,003,984 6,933,895 4,771,917 4,072,520 3,950,481 3,622,915 2,532,038
14.81 12.39 12.08 11.95 11.52 9.98 6.87 5.86 5.69 5.21 3.64
70,454,673
69,477,846
100.00
Cost
Market value
% of market value
43,408,896 28,389,920 24,790,344 13,046,020 9,728,735 11,856,334 8,103,947 8,488,421 7,815,657 155,628,274
42,946,738 27,203,200 24,831,576 14,910,562 12,255,743 12,090,993 11,111,987 8,349,975 7,953,160 161,653,934
26.57 16.83 15.36 9.22 7.58 7.48 6.87 5.17 4.92 100.00
Sector 30 June 2016
Banks & Financial Services Real Estate & Development Industrial Investments Retail Agriculture & Food Industries Petrochemical Industries Transport Hotel and Tourism Cements Insurance Building and Construction
Sector 30 June 2015 Banks & Financial Services Petrochemical Industries Retail Agriculture & Food Industries Transport Industrial Investments Real Estate & Development Telecommunication & Information Technology Hotel and Tourism
9.
TRADING (LOSS) / GAIN - NET 2016
2015
Realised (loss) / gain on disposal of investments held for trading
(9,458,085)
9,977,302
Unrealised gain on revaluation of investments held for trading
6,426,789 (3,031,296)
21,679,004 31,656,306
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGEMENT BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED)
7
For the six months period ended 30 June 2016 (Amounts in SAR) 10.
OTHER EXPENSE
Professional fee Fund board fee
11.
2016
2015
25,496
19,619
872 26,368
3,668 23,287
TRANSACTIONS WITH RELATED PARTIES Saudi Fransi Capital (the “Fund Manager”), Banque Saudi Fransi (the “Bank” and the Shareholder of the Fund Manager) Unitholders, and affiliates of the Fund manager are related parties. In the ordinary course of its activities, the Fund transacts business with related parties. The related party transactions are governed by limits set by the regulations issued by CMA. All the related party transactions are approved by the Fund Board. Related party transactions for the period ended and balance resulting from these transactions are as follows: Name of related party
Amount of transactions during the period
Nature of transactions Fund Management fee
Saudi Fransi Capital
Brokerage fee
2016 751,310
2015 1,765,750
2016 115,355
2015 285,128
9,514
27,372
--
--
--
4,880,111
--
--
872
3,668
269
3,668
Borrowing Fund board
Closing balance
Annual remuneration
The Fund in the normal course of business borrowed interest free money from the Fund Manager. As per the terms and conditions, the amount of outstanding borrowing at any point in time should not exceed 10% of the Fund’ s net asset value. The units in issue at 30 June 2016 include units held by the employees of Banque Saudi Fransi and Saudi Fransi Capital: 67,029 units (30 June 2015: 18,049 units). 12.
FAIR VALUES OF FINANCIAL INSTRUMENTS 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. Financial instruments comprise financial assets and financial liabilities. The Fund’s financial assets comprise of bank balance and investments held for trading and its financial liabilities comprise of accrued expenses and bank borrowings. Investments held for trading are carried at fair values. The fair values of other financial instruments are not materially different from their carrying values. Investments held for trading comprise of listed equities, fluctuation in the stock market may cause changes in fair value of the investments portfolio.
8
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016
13.
SUBSCRIPTION REQUEST The Fund has received subscription request as of 30 June 2016, amounting to SAR Nil (30 June 2015: SAR 1,499,180) after the cutoff time and hence issued units subsequent to period end.
14.
LAST VALUATION DAY In accordance with terms and conditions of the Fund, the last valuation date of the period was 30 June 2016 (2015: 29 June 2015). The last valuation date for the purpose of preparation of these interim condensed financial statements was 30 June 2016 (2015: 30 June 2015).
9
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED BALANCE SHEET (UN-AUDITED) As at 30 June 2016 (Amounts in SAR) Note
2016
2015
8,657,423 2,513 69,477,846
18,231,471 -161,653,934
78,137,782
179,885,405
115,355 23,278 138,633 77,999,149
285,128 23,287 308,415 179,576,990
10,658,168
18,099,599
7.3183
9.9216
ASSETS Cash and cash equivalents Prepaid Expenses Investments held for trading
7 8
Total assets LIABILITIES Fund management fee payable Accrued expenses Total liabilities Net asset attributable to the Unitholders
6, 11
Units in issue (numbers) Net asset value - per unit
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements. The interim condensed financial statements appearing from page 1 to 9 were approved by the Fund Manager (as per the terms and conditions of the Fund) on 14th August 2016.
1
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED STATEMENT OF INCOME (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR)
2016
2015
9
(3,031,296) 1,224,653 (1,806,643)
31,656,306 2,271,237 33,927,543
6, 11 10
(751,310) (26,368) (777,678) (2,584,321)
(1,765,750) (23,287) (1,789,037) 32,138,506
Note INCOME Trading (loss) / gain - net Dividend income EXPENSES Fund management fee Other expenses Net (loss) / income for the period
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements.
2
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED STATEMENT OF CASH FLOWS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 2016
2015
(2,584,321)
32,138,506
9,458,085 (6,426,789) 446,975
(9,977,302) (21,679,004) 482,200
(81,307,361) 77,265,611 (2,513) (35,728) (30,908) (3,663,924)
(198,506,946) 267,222,389 -(26,893) (12,902) 69,157,848
Proceeds from issuance of units Payments for redemption of units Cash Distribution Net cash used in from financing activities
3,234,943 (19,440,515) (2,100,885) (18,306,457)
21,939,683 (71,933,226) (5,240,847) (55,234,390)
Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
(21,970,381) 30,627,804 8,657,423
13,923,458 4,308,013 18,231,471
CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) / income for the period Adjustments to reconcile net income to net cash (used in) / generated from operating activities: Realised loss / (gain) on investments held for trading Unrealised gain on investments held for trading Changes in operating assets and liabilities Investments held for trading Dividend receivable Prepaid Expenses Fund management fee payable Accrued expenses Net cash (used in) / generated from operating activities CASH FLOWS FROM FINANCING ACTIVITIES
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements.
3
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) INTERIM CONDENSED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO THE UNITHOLDERS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 2016
2015
Net asset attributable to the Unitholders at the beginning of the period
98,889,927
202,672,874
Net (loss) / income for the period
(2,584,321)
32,138,506
3,234,943 (19,440,515) (16,205,572)
21,939,683 (71,933,226) (49,993,543)
Cash Distribution
(2,100,885)
(5,240,847)
Net asset attributable to the Unitholders at the end of the period
77,999,149
179,576,990
Changes from unit transactions Proceeds from issuance of units Payments for redemption of units Net changes from unit transactions
Transactions in units for the period are summarized as follows: (In numbers)
Units at the beginning of the period Units issued Units redeemed
12,879,485 472,301 (2,693,618)
23,273,853 2,253,142 (7,427,396)
Net change in units
(2,221,317)
(5,174,254)
Units at the end of the period
10,658,168
18,099,599
The accompanying notes 1 to 14 form an integral part of these interim condensed financial statements.
4
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016 1.
THE FUND AND ITS ACTIVITIES Saudi Fransi Saudi Equity Income Fund (the Fund) is an open ended Saudi Riyal denominated investment fund based on an agreement between Saudi Fransi Capital (the ‘Fund Manager’) and investors (the ‘Unitholders’). The Fund commenced its operations on 20 February 2014. The objective of the Fund is to provide medium to long term growth by investing in listed companies in the Saudi Arabian Equity Market. The Fund will only invest in companies that fulfill Shariah Board Criteria. The Fund also aims to make a half yearly cash distribution to its unitholders considering two options, whichever is higher. 2.5% of unit price (NAV), regardless of the Fund’s performance or if the Fund’s unit price (NAV) on the record day achieves a new high (since the Fund’s inception) compared to the unit prices (NAV) registered in the previous record day, then the Fund will distribute 50% of the increase from the previous unit price (NAV) at the previous record day. The Fund updated its terms and conditions which were approved by the Capital Market Authority (CMA) on 24 Sha’aban 1436H (corresponding to 11 June 2015). The Fund Manager and Custodian of the Fund is Saudi Fransi Capital.
2.
REGULATORY AUTHORITY The Fund is governed by the Investment Fund Regulations (“the Regulations”) published by the Capital Market Authority (CMA) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006), detailing requirements for all investment funds within the Kingdom of Saudi Arabia.
3.
SUBSCRIPTION / REDEMPTION OF UNITS The Fund is open for subscriptions / redemptions with a cutoff time of 12:00 pm on Sunday, Tuesday and Wednesday. The net asset attributable to the Unitholders of the Fund’s portfolio is determined on Monday, Wednesday and Thursday (each a “Dealing day”). The net asset attributable to the Unitholders of the Fund for the purpose of subscription/ redemption of units is determined by dividing the net asset attributable to the Unitholders of the Fund (fair value of the Fund’s assets minus the Fund’s liabilities) by the total number of the Fund’s units outstanding on the relevant dealing day.
4.
BASIS OF PREPARATION
4.1
Statement of compliance These interim condensed financial statements have been presented in accordance with the requirements of the accounting standards on financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). These interim condensed financial statements have been presented in condensed form and did not include all the information presented in annual financial statements of the Fund; therefore, these interim condensed financial statements 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 does not necessarily constitute an indication of the year-end financial results. Certain prior period figures have been reclassified to conform with the current period presentation.
5
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 4.
BASIS OF PREPARATION (CONTINUED)
4.2
Basis of measurement These interim condensed financial statements have been prepared under the historical cost convention using the accrual basis of accounting and the going concern concept, except for the measurement of investments held for trading at fair value.
4.3
Functional and presentation currency These interim condensed financial statements are presented in Saudi Arabian Riyals (SAR), which is the also functional currency of the Fund. All financial information presented has been rounded to the nearest SAR.
4.4
Use of estimates and judgments In the ordinary course of business, the preparation of the 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 on a prospective basis.
5.
SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT POLICIES The significant accounting policies used in the preparation of these interim condensed financial statements and the risk management policies are consistent with those used and disclosed in the annual financial statements for the period ended 31 December 2015.
6.
MANAGEMENT FEE AND OTHER CHARGES The Fund pays management fee calculated at an annual rate of 1.75 percent for the net asset value. This is accrued daily and paid on monthly basis. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit fee, board compensation and other similar charges. Subscription fee up to 3 percent of the invested amount is adjusted by deduction from the gross subscription, hence, it does not impact or reflect in the financial statements of the Fund.
7.
CASH AND CASH EQUIVALENTS
Cash at bank Cash at brokerage investment account
6
2016
2015
253,243 8,404,180 8,657,423
11,913 18,219,558 18,231,471
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016 (Amounts in SAR) 8.
INVESTMENTS HELD FOR TRADING The sector-wise composition of investment held for trading is summarized as follows: Cost
Market value
% of market value
11,451,212 7,550,217 7,721,518 7,197,390 7,653,380 6,318,841 4,908,728 7,519,309 3,809,871 3,621,456 2,702,751
10,289,251 8,606,212 8,395,328 8,299,305 8,003,984 6,933,895 4,771,917 4,072,520 3,950,481 3,622,915 2,532,038
14.81 12.39 12.08 11.95 11.52 9.98 6.87 5.86 5.69 5.21 3.64
70,454,673
69,477,846
100.00
Cost
Market value
% of market value
43,408,896 28,389,920 24,790,344 13,046,020 9,728,735 11,856,334 8,103,947 8,488,421 7,815,657 155,628,274
42,946,738 27,203,200 24,831,576 14,910,562 12,255,743 12,090,993 11,111,987 8,349,975 7,953,160 161,653,934
26.57 16.83 15.36 9.22 7.58 7.48 6.87 5.17 4.92 100.00
Sector 30 June 2016
Banks & Financial Services Real Estate & Development Industrial Investments Retail Agriculture & Food Industries Petrochemical Industries Transport Hotel and Tourism Cements Insurance Building and Construction
Sector 30 June 2015 Banks & Financial Services Petrochemical Industries Retail Agriculture & Food Industries Transport Industrial Investments Real Estate & Development Telecommunication & Information Technology Hotel and Tourism
9.
TRADING (LOSS) / GAIN - NET 2016
2015
Realised (loss) / gain on disposal of investments held for trading
(9,458,085)
9,977,302
Unrealised gain on revaluation of investments held for trading
6,426,789 (3,031,296)
21,679,004 31,656,306
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGEMENT BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED)
7
For the six months period ended 30 June 2016 (Amounts in SAR) 10.
OTHER EXPENSE
Professional fee Fund board fee
11.
2016
2015
25,496
19,619
872 26,368
3,668 23,287
TRANSACTIONS WITH RELATED PARTIES Saudi Fransi Capital (the “Fund Manager”), Banque Saudi Fransi (the “Bank” and the Shareholder of the Fund Manager) Unitholders, and affiliates of the Fund manager are related parties. In the ordinary course of its activities, the Fund transacts business with related parties. The related party transactions are governed by limits set by the regulations issued by CMA. All the related party transactions are approved by the Fund Board. Related party transactions for the period ended and balance resulting from these transactions are as follows: Name of related party
Amount of transactions during the period
Nature of transactions Fund Management fee
Saudi Fransi Capital
Brokerage fee
2016 751,310
2015 1,765,750
2016 115,355
2015 285,128
9,514
27,372
--
--
--
4,880,111
--
--
872
3,668
269
3,668
Borrowing Fund board
Closing balance
Annual remuneration
The Fund in the normal course of business borrowed interest free money from the Fund Manager. As per the terms and conditions, the amount of outstanding borrowing at any point in time should not exceed 10% of the Fund’ s net asset value. The units in issue at 30 June 2016 include units held by the employees of Banque Saudi Fransi and Saudi Fransi Capital: 67,029 units (30 June 2015: 18,049 units). 12.
FAIR VALUES OF FINANCIAL INSTRUMENTS 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. Financial instruments comprise financial assets and financial liabilities. The Fund’s financial assets comprise of bank balance and investments held for trading and its financial liabilities comprise of accrued expenses and bank borrowings. Investments held for trading are carried at fair values. The fair values of other financial instruments are not materially different from their carrying values. Investments held for trading comprise of listed equities, fluctuation in the stock market may cause changes in fair value of the investments portfolio.
8
SAUDI FRANSI SAUDI EQUITY INCOME FUND An Open-Ended Mutual Fund (MANAGED BY SAUDI FRANSI CAPITAL) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED) For the six months period ended 30 June 2016
13.
SUBSCRIPTION REQUEST The Fund has received subscription request as of 30 June 2016, amounting to SAR Nil (30 June 2015: SAR 1,499,180) after the cutoff time and hence issued units subsequent to period end.
14.
LAST VALUATION DAY In accordance with terms and conditions of the Fund, the last valuation date of the period was 30 June 2016 (2015: 29 June 2015). The last valuation date for the purpose of preparation of these interim condensed financial statements was 30 June 2016 (2015: 30 June 2015).
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