SAIB GCC Equity Income Fund
SAIB GCC Equity Income Fund (Managed by Alistithmar for Financial Securities and Brokerage Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2017
SAIB GCC Equity Income Fund INTERIM BALANCE SHEET As at 30 June 2017 30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
2,023,714 12,564,163 14,228 ───────── 14,602,105 ─────────
2,249,234 13,509,764 ───────── 15,758,998 ─────────
610,780 11,886,242 21,508 ───────── 12,518,530 ─────────
Accrued expenses
31,725 ─────────
63,252 ─────────
35,530 ─────────
NET ASSETS
14,570,380 ═════════
15,695,746 ═════════
12,483,000 ═════════
Units in issue
205,304 ═════════
205,687 ═════════
165,557 ═════════
Per unit value
SAR 70.97 ═════════
SAR 76.31 ═════════
SAR 75.40 ═════════
Note
30 June 2016 (Unaudited) SR
ASSETS Bank balance Trading investments Dividend receivable Other receivable
4
LIABILITY
The accompanying notes 1 to 8 form part of these interim financial statements. 2
SAIB GCC Equity Income Fund INTERIM STATEMENT OF OPERATIONS Six month period ended 30 June 2017
Note
2017 (Unaudited) SR
2016 (Unaudited) SR
INVESTMENT (LOSS) INCOME Trading (loss) income, net
5
(474,178) ─────────
292,053 ─────────
Management fees Others
6
)128,398( )31,575( ───────── )159,973( ─────────
(106,122) (108,319) ───────── (214,441) ─────────
NET (LOSS) INCOME FROM OPERATIONS
8
(634,151) ═════════
77,612 ═════════
EXPENSES
The accompanying notes 1 to 8 form part of these interim financial statements. 3
SAIB GCC Equity Income Fund INTERIM STATEMENT OF CASH FLOWS Six month period ended 30 June 2017
2017 Unaudited) SR
2016 (Unaudited) SR
OPERATING ACTIVITIES Net (loss) income from operations
(634,151)
77,612
443,381
(1,116,174)
502,220 (14,228) (31,527) ───────── 265,695 ─────────
1,657,808 183,008 (24,133) ───────── 778,121 ─────────
7,920 (36,747) )462,388( ───────── )491,215( ─────────
53,856 (1,567,852) (319,894) ───────── (1,833,890) ─────────
)225,520(
(1,055,769)
2,249,234 ───────── 2,023,714 ═════════
1,666,549 ───────── 610,780 ═════════
610,543 ═════════
529,633 ═════════
Adjustment for: Movement in unrealised losses (gains) on trading investments Changes in operating assets and liability: Trading investments Dividend receivable Other receivable Accrued expenses Net cash from operating activities FINANCING ACTIVITIES Value of units sold Value of units redeemed Dividend paid to unitholders Net cash used in financing activities
DECREASE IN BANK BALANCE Bank balance at the beginning of the period BANK BALANCE AT THE END OF THE PERIOD
Operational cash flows from dividend income Dividend received
The accompanying notes 1 to 8 form part of these interim financial statements. 4
SAIB GCC Equity Income Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2017 2017 (Unaudited) SR
2016 (Unaudited) SR
15,695,746 ─────────
14,239,278 ─────────
)634,151( ─────────
77,612 ─────────
7,920 )36,747( ───────── (28,827) ───────── (462,388) ─────────
53,856 )1,567,852( ───────── (1,513,996) ───────── (319,894) ─────────
14,570,380 ═════════
12,483,000 ═════════
2017 (Unaudited) Units
2016 (Unaudited) Units
UNITS AT THE BEGINNING OF THE PERIOD
205,687 ─────────
186,879 ─────────
Units sold Units redeemed
107 )490( ───────── (383) ─────────
725 (22,047) ───────── (21,322) ─────────
205,304 ═════════
165,557 ═════════
NET ASSETS VALUE AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net (loss) income from operations CHANGES FROM UNIT TRANSACTIONS Value of units sold Value of units redeemed Net change from unit transactions DIVIDEND PAID TO UNITHOLDERS
NET ASSETS VALUE AT THE END OF THE PERIOD
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
Net decrease in units
UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 8 form part of these interim financial statements. 5
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 JUNE 2017 1
GENERAL
SAIB GCC Equity Income Fund (the Fund) is an open ended fund created by an agreement between the Fund Manager and investors (the Unitholders) in the Fund. The Fund commenced operation on 27 April 2015. The Fund is designed for investors that seek to invest in Shariah-compliant GCC companies that have dividend payout policy. The Fund will distribute twice a year all cash dividend income it receives from the underlying investments and will not retain any such dividend income. All other income is reinvested in the fund and is reflected in the unit price. Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital), wholly owned subsidiary of the Saudi Investment Bank (The Bank) is the Fund Manager, Broker and Custodian of the Fund. The books and records of the Fund are maintained in Saudi Riyals (SR). 2
REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by the CMA on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) and effective from 6 Safar 1438H (corresponding 6 November 2016) by the New Investment Fund Regulations (“Amended Regulations”) published by the Capital Market Authority on 16 Sha’aban 1437H (corresponding to 23 May 2016), detailing requirements for all funds within the Kingdom of Saudi Arabia. 3
SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements have been prepared in accordance with the accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). The significant accounting policies used in the preparation of these interim financial statements are consistent with those used and disclosed in the annual financial statements for the year ended 31 December 2016 and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention modified to include the measurement at fair value of trading investments. Revenue recognition Trading income includes movement in unrealised gains (losses) from changes in fair value, realised gains (losses) from sale of trading investments and dividends from trading investments. Realised gains (losses) on trading investments sold are determined on a weighted average cost basis. Dividend income is recognised when declared (i.e. when the Fund’s right to receive the dividend is established). Investment valuation Equity investments which are purchased for trading purposes are valued at their market price as at the balance sheet date. Investments in mutual funds are valued on the basis of net asset values published by the Fund Manager. Investment transactions Investment transactions are accounted for as of the trade date. Zakat and income tax Zakat and income tax are the obligations of the Unit holders and are not provided for in the accompanying interim financial statements. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyals at the rates of exchange prevailing at the dates of the transaction. Assets and liabilities in foreign currencies at the balance sheet date are retranslated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations.
6
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2017 4.
TRADING INVESTMENTS
The composition of the trading investment portfolio on the balance sheet date is summarised below: Cost SR
Market value SR
% of market value
1,383,608 770,452 1,459,537 922,401 4,575,019 ───────── 9,111,017
1,554,069 901,368 745,984 478,335 4,404,419 ───────── 8,084,175
12.37 7.17 5.94 3.81 35.06 ───── 64.34
2,765,976 1,222,832 554,895 ───────── 13,654,720 ═════════
2,978,358 1,085,971 415,659 ───────── 12,564,163 ═════════
23.71 8.64 3.31 ───── 100.00 ═════
1,320,513 1,971,885 770,452 1,106,832 3,811,244 ─────────
12.18 9.43 6.28 5.47 28.94 ─────
8,980,926
1,645,615 1,274,193 848,835 738,707 3,909,123 ───────── 8,416,473
2,851,229 1,769,889 554,896 ───────── 14,156,940 ═════════
2,647,361 1,891,107 554,823 ───────── 13,509,764 ═════════
19.60 14.00 4.10 ───── 100.00 ═════
30 June 2017 (Unaudited) Equity investments Kingdom of Saudi Arabia – Sectors: Petrochemical Telecommunication Cement Agriculture Others
Other Countries: United Arab Emirates Qatar Oman
31 December 2016 (Audited) Equity investments Kingdom of Saudi Arabia – Sectors: Petrochemical Cement Telecommunication Agriculture Others
Other Countries: Qatar United Arab Emirates Muscat
7
62.30
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2017 4.
TRADING INVESTMENTS (continued) Cost SR
Market value SR
% of market value
4,590,688 946,429 1,106,832 604,588 4,095,202 ───────── 11,343,739
2,891,214 891,963 741,782 655,787 3,778,799 ───────── 8,959,545
24.32 7.50 6.24 5.52 31.79 ───── 75.37
1,694,192 554,896 494,794 ───────── 14,087,621
1,366,503 598,769 460,283 ───────── 11,385,100
11.50 5.04 3.87 ───── 95.78
500,000 ───────── 14,587,621 ═════════
501,142 ───────── 11,886,242 ═════════
4.22 ───── 100.00 ═════
30 June 2016 (Unaudited) Equity investments Kingdom of Saudi Arabia – Sectors: Cement Telecommunication Agriculture Petrochemical Others
Other Countries: Qatar Oman United Arab Emirates
Mutual Funds Investment: SAIB Sukuk Fund
5
TRADING (LOSS) INCOME, NET Six month period ended 30 June 2017 (Unaudited) SR
Dividend income Movement in unrealised (losses) gains Realised losses
6.
624,771 (443,381) )655,568( ──────── )474,178( ═════════
2016 (Unaudited) SR 551,141 1,116,174 (1,375,262) ──────── 292,053 ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund paid a management fee, administration fee and custody fee at an annual rate of 1.5%, 0.1% and 0.1% respectively of the net asset value at each valuation date. The management fees reflected in the statement of operations represent the fees charged by the Fund Manager during the period. Additionally, administration expenses paid by the Fund Manager on behalf of the Fund are reimbursed from the Fund, subject to a maximum administration expense of 0.60% of net asset value per annum. Trade transactions on Tadawul and other GCC countries’ stock exchanges are executed through Alistithmar Capital which is also the custodian of the Fund’s investments. The Bank acts as the Fund’s banker. 7
LAST VALUATION DAY
The last valuation day of the period was 30 June 2017 ( 2016: 29 June 2016). 8.
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results. 8
SAIB GCC Equity Income Fund INTERIM BALANCE SHEET As at 30 June 2017 30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
2,023,714 12,564,163 14,228 ───────── 14,602,105 ─────────
2,249,234 13,509,764 ───────── 15,758,998 ─────────
610,780 11,886,242 21,508 ───────── 12,518,530 ─────────
Accrued expenses
31,725 ─────────
63,252 ─────────
35,530 ─────────
NET ASSETS
14,570,380 ═════════
15,695,746 ═════════
12,483,000 ═════════
Units in issue
205,304 ═════════
205,687 ═════════
165,557 ═════════
Per unit value
SAR 70.97 ═════════
SAR 76.31 ═════════
SAR 75.40 ═════════
Note
30 June 2016 (Unaudited) SR
ASSETS Bank balance Trading investments Dividend receivable Other receivable
4
LIABILITY
The accompanying notes 1 to 8 form part of these interim financial statements. 2
SAIB GCC Equity Income Fund INTERIM STATEMENT OF OPERATIONS Six month period ended 30 June 2017
Note
2017 (Unaudited) SR
2016 (Unaudited) SR
INVESTMENT (LOSS) INCOME Trading (loss) income, net
5
(474,178) ─────────
292,053 ─────────
Management fees Others
6
)128,398( )31,575( ───────── )159,973( ─────────
(106,122) (108,319) ───────── (214,441) ─────────
NET (LOSS) INCOME FROM OPERATIONS
8
(634,151) ═════════
77,612 ═════════
EXPENSES
The accompanying notes 1 to 8 form part of these interim financial statements. 3
SAIB GCC Equity Income Fund INTERIM STATEMENT OF CASH FLOWS Six month period ended 30 June 2017
2017 Unaudited) SR
2016 (Unaudited) SR
OPERATING ACTIVITIES Net (loss) income from operations
(634,151)
77,612
443,381
(1,116,174)
502,220 (14,228) (31,527) ───────── 265,695 ─────────
1,657,808 183,008 (24,133) ───────── 778,121 ─────────
7,920 (36,747) )462,388( ───────── )491,215( ─────────
53,856 (1,567,852) (319,894) ───────── (1,833,890) ─────────
)225,520(
(1,055,769)
2,249,234 ───────── 2,023,714 ═════════
1,666,549 ───────── 610,780 ═════════
610,543 ═════════
529,633 ═════════
Adjustment for: Movement in unrealised losses (gains) on trading investments Changes in operating assets and liability: Trading investments Dividend receivable Other receivable Accrued expenses Net cash from operating activities FINANCING ACTIVITIES Value of units sold Value of units redeemed Dividend paid to unitholders Net cash used in financing activities
DECREASE IN BANK BALANCE Bank balance at the beginning of the period BANK BALANCE AT THE END OF THE PERIOD
Operational cash flows from dividend income Dividend received
The accompanying notes 1 to 8 form part of these interim financial statements. 4
SAIB GCC Equity Income Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2017 2017 (Unaudited) SR
2016 (Unaudited) SR
15,695,746 ─────────
14,239,278 ─────────
)634,151( ─────────
77,612 ─────────
7,920 )36,747( ───────── (28,827) ───────── (462,388) ─────────
53,856 )1,567,852( ───────── (1,513,996) ───────── (319,894) ─────────
14,570,380 ═════════
12,483,000 ═════════
2017 (Unaudited) Units
2016 (Unaudited) Units
UNITS AT THE BEGINNING OF THE PERIOD
205,687 ─────────
186,879 ─────────
Units sold Units redeemed
107 )490( ───────── (383) ─────────
725 (22,047) ───────── (21,322) ─────────
205,304 ═════════
165,557 ═════════
NET ASSETS VALUE AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net (loss) income from operations CHANGES FROM UNIT TRANSACTIONS Value of units sold Value of units redeemed Net change from unit transactions DIVIDEND PAID TO UNITHOLDERS
NET ASSETS VALUE AT THE END OF THE PERIOD
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
Net decrease in units
UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 8 form part of these interim financial statements. 5
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 JUNE 2017 1
GENERAL
SAIB GCC Equity Income Fund (the Fund) is an open ended fund created by an agreement between the Fund Manager and investors (the Unitholders) in the Fund. The Fund commenced operation on 27 April 2015. The Fund is designed for investors that seek to invest in Shariah-compliant GCC companies that have dividend payout policy. The Fund will distribute twice a year all cash dividend income it receives from the underlying investments and will not retain any such dividend income. All other income is reinvested in the fund and is reflected in the unit price. Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital), wholly owned subsidiary of the Saudi Investment Bank (The Bank) is the Fund Manager, Broker and Custodian of the Fund. The books and records of the Fund are maintained in Saudi Riyals (SR). 2
REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by the CMA on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) and effective from 6 Safar 1438H (corresponding 6 November 2016) by the New Investment Fund Regulations (“Amended Regulations”) published by the Capital Market Authority on 16 Sha’aban 1437H (corresponding to 23 May 2016), detailing requirements for all funds within the Kingdom of Saudi Arabia. 3
SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements have been prepared in accordance with the accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). The significant accounting policies used in the preparation of these interim financial statements are consistent with those used and disclosed in the annual financial statements for the year ended 31 December 2016 and are as follows: Accounting convention The interim financial statements are prepared under the historical cost convention modified to include the measurement at fair value of trading investments. Revenue recognition Trading income includes movement in unrealised gains (losses) from changes in fair value, realised gains (losses) from sale of trading investments and dividends from trading investments. Realised gains (losses) on trading investments sold are determined on a weighted average cost basis. Dividend income is recognised when declared (i.e. when the Fund’s right to receive the dividend is established). Investment valuation Equity investments which are purchased for trading purposes are valued at their market price as at the balance sheet date. Investments in mutual funds are valued on the basis of net asset values published by the Fund Manager. Investment transactions Investment transactions are accounted for as of the trade date. Zakat and income tax Zakat and income tax are the obligations of the Unit holders and are not provided for in the accompanying interim financial statements. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyals at the rates of exchange prevailing at the dates of the transaction. Assets and liabilities in foreign currencies at the balance sheet date are retranslated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations.
6
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2017 4.
TRADING INVESTMENTS
The composition of the trading investment portfolio on the balance sheet date is summarised below: Cost SR
Market value SR
% of market value
1,383,608 770,452 1,459,537 922,401 4,575,019 ───────── 9,111,017
1,554,069 901,368 745,984 478,335 4,404,419 ───────── 8,084,175
12.37 7.17 5.94 3.81 35.06 ───── 64.34
2,765,976 1,222,832 554,895 ───────── 13,654,720 ═════════
2,978,358 1,085,971 415,659 ───────── 12,564,163 ═════════
23.71 8.64 3.31 ───── 100.00 ═════
1,320,513 1,971,885 770,452 1,106,832 3,811,244 ─────────
12.18 9.43 6.28 5.47 28.94 ─────
8,980,926
1,645,615 1,274,193 848,835 738,707 3,909,123 ───────── 8,416,473
2,851,229 1,769,889 554,896 ───────── 14,156,940 ═════════
2,647,361 1,891,107 554,823 ───────── 13,509,764 ═════════
19.60 14.00 4.10 ───── 100.00 ═════
30 June 2017 (Unaudited) Equity investments Kingdom of Saudi Arabia – Sectors: Petrochemical Telecommunication Cement Agriculture Others
Other Countries: United Arab Emirates Qatar Oman
31 December 2016 (Audited) Equity investments Kingdom of Saudi Arabia – Sectors: Petrochemical Cement Telecommunication Agriculture Others
Other Countries: Qatar United Arab Emirates Muscat
7
62.30
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2017 4.
TRADING INVESTMENTS (continued) Cost SR
Market value SR
% of market value
4,590,688 946,429 1,106,832 604,588 4,095,202 ───────── 11,343,739
2,891,214 891,963 741,782 655,787 3,778,799 ───────── 8,959,545
24.32 7.50 6.24 5.52 31.79 ───── 75.37
1,694,192 554,896 494,794 ───────── 14,087,621
1,366,503 598,769 460,283 ───────── 11,385,100
11.50 5.04 3.87 ───── 95.78
500,000 ───────── 14,587,621 ═════════
501,142 ───────── 11,886,242 ═════════
4.22 ───── 100.00 ═════
30 June 2016 (Unaudited) Equity investments Kingdom of Saudi Arabia – Sectors: Cement Telecommunication Agriculture Petrochemical Others
Other Countries: Qatar Oman United Arab Emirates
Mutual Funds Investment: SAIB Sukuk Fund
5
TRADING (LOSS) INCOME, NET Six month period ended 30 June 2017 (Unaudited) SR
Dividend income Movement in unrealised (losses) gains Realised losses
6.
624,771 (443,381) )655,568( ──────── )474,178( ═════════
2016 (Unaudited) SR 551,141 1,116,174 (1,375,262) ──────── 292,053 ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund paid a management fee, administration fee and custody fee at an annual rate of 1.5%, 0.1% and 0.1% respectively of the net asset value at each valuation date. The management fees reflected in the statement of operations represent the fees charged by the Fund Manager during the period. Additionally, administration expenses paid by the Fund Manager on behalf of the Fund are reimbursed from the Fund, subject to a maximum administration expense of 0.60% of net asset value per annum. Trade transactions on Tadawul and other GCC countries’ stock exchanges are executed through Alistithmar Capital which is also the custodian of the Fund’s investments. The Bank acts as the Fund’s banker. 7
LAST VALUATION DAY
The last valuation day of the period was 30 June 2017 ( 2016: 29 June 2016). 8.
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results. 8
