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 2016
SAIB GCC Equity Income Fund BALANCE SHEET As at 30 June 2016 30 June 2016 (Unaudited) SR
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
610,780 11,886,242 21,508 ───────── 12,518,530 ─────────
1,666,549 12,427,876 204,516 ───────── 14,298,941 ─────────
730,909 19,112,606 589,975 ───────── 20,433,490 ─────────
35,530 ─────────
59,663 ─────────
24,526 ─────────
NET ASSETS
12,483,000 ═════════
14,239,278 ═════════
20,408,964 ═════════
Units in issue
165,557 ═════════
186,879 ═════════
205,554 ═════════
Per unit value
SAR 75.40 ═════════
SAR 76.20 ═════════
SR 99.29 ═════════
Note ASSETS Bank balance Trading investments Other receivable
4
LIABILITY Accrued expenses
The accompanying notes 1 to 8 form part of these interim financial statements. 2
SAIB GCC Equity Income Fund STATEMENT OF OPERATIONS
Note INVESTMENT INCOME (LOSS) Trading income (loss), net
For the sixmonth period ended 30 June 2016 (Unaudited) SR
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
5
292,053 ─────────
(89,054) ─────────
EXPENSES Management fees Others
6
NET INCOME (LOSS) FROM OPERATIONS
8
(106,122) (108,319) ───────── (214,441) ───────── 77,612 ═════════
(50,505) (20,332) ───────── (70,837) ───────── (159,891) ═════════
The accompanying notes 1 to 8 form part of these interim financial statements. 3
SAIB GCC Equity Income Fund STATEMENT OF CASH FLOWS For the sixmonth period ended 30 June 2016 (Unaudited) SR OPERATING ACTIVITIES Net income (loss) from operations
77,612
Adjustment for: Movement in unrealised (gains) losses on trading investments Changes in operating assets and liability: Trading investments Other receivable Accrued expenses Net cash from (used in) operating activities FINANCING ACTIVITIES Value of units sold Value of units redeemed Dividend paid to unitholders Net cash (used in) from financing activities (DECREASE) / INCREASE 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
(1,116,174)
(159,891)
173,835
1,657,808 183,008 (24,133) ───────── 778,121 ─────────
(19,236,441) (589,975) 24,526 ───────── (19,837,946) ─────────
53,856 (1,567,852) (319,894) ───────── (1,833,890) ───────── (1,055,769)
24,038,760 (3,469,905) ───────── 20,568,855 ───────── 730,909
1,666,549 ───────── 610,780 ═════════
───────── 730,909 ═════════
529,633 ═════════
89,975 ═════════
The accompanying notes 1 to 8 form part of these interim financial statements. 4
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
SAIB GCC Equity Income Fund STATEMENT OF CHANGES IN NET ASSETS For the sixmonth period ended 30 June 2016 (Unaudited) SR
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
14,239,278 ─────────
─────────
77,612 ─────────
(159,891) ─────────
53,856 (1,567,852) ───────── (1,513,996) ───────── (319,894) ───────── 12,483,000 ═════════
24,038,760 (3,469,905) ───────── 20,568,855 ───────── ───────── 20,408,964 ═════════
For the sixmonth period ended 30 June 2016 (Unaudited) SR
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
UNITS AT THE BEGINNING OF THE PERIOD
186,879 ─────────
─────────
Units sold Units redeemed
725 (22,047) ───────── (21,322) ───────── 165,557 ═════════
240,292 (34,738) ───────── 205,554 ───────── 205,554 ═════════
NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income (loss) 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 AT THE END OF THE PERIOD
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
Net (decrease) increase 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 2016 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) published by Capital Market Authority (CMA) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) 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 as follows: Accounting convention The 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 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 statement of operations.
6
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2016 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
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 ═════
6,565,260 1,267,958 1,157,503 783,341 3,383,169 ─────────
4,363,678 965,761 1,163,310 469,945 2,769,094 ─────────
35.11 7.77 9.36 3.78 22.28 ─────
13,157,231
9,731,788
78.31
1,694,192 894,006 ───────── 15,745,429
1,380,385 817,338 ───────── 11,929,511
11.11 6.58 ───── 95.99
500,000 ───────── 16,245,429 ═════════
498,365 ───────── 12,427,876 ═════════
4.01 ───── 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
31 December 2015 (Audited) Equity investments Kingdom of Saudi Arabia – Sectors: Cement Agriculture Telecommunication Petrochemical Others
Other Countries: Qatar Kuwait
Mutual Funds Investment: SAIB Sukuk Fund
7
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2016 4.
TRADING INVESTMENTS (continued) Cost SR
Market value SR
% of market value
7,578,897 1,888,353 1,157,503 783,341 4,305,903 ───────── 15,713,999
7,352,125 1,914,967 1,143,250 768,355 4,383,013 ───────── 15,561,710
38.47 10.02 5.98 4.02 22.93 ───── 81.42
1,693,205 985,144 894,094 ───────── 19,286,441 ═════════
1,650,403 1,004,019 896,474 ───────── 19,112,606 ═════════
8.64 5.25 4.69 ───── 100.00 ═════
30 June 2015 (Unaudited) Equity investments Kingdom of Saudi Arabia – Sectors: Cement Agriculture Telecommunication Petrochemical Others
Other Countries: Qatar Kuwait United Arab Emirates
5
TRADING INCOME (LOSS), NET For the sixmonth period ended 30 June 2016 (Unaudited) SR
Realised losses Dividend income Movement in unrealised gains (losses)
6.
(1,375,262) 551,141 1,116,174 ──────── 292,053 ═════════
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR (5,194) 89,975 (173,835) ──────── (89,054) ═════════
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 2016. (2015: 30 June 2015). 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 BALANCE SHEET As at 30 June 2016 30 June 2016 (Unaudited) SR
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
610,780 11,886,242 21,508 ───────── 12,518,530 ─────────
1,666,549 12,427,876 204,516 ───────── 14,298,941 ─────────
730,909 19,112,606 589,975 ───────── 20,433,490 ─────────
35,530 ─────────
59,663 ─────────
24,526 ─────────
NET ASSETS
12,483,000 ═════════
14,239,278 ═════════
20,408,964 ═════════
Units in issue
165,557 ═════════
186,879 ═════════
205,554 ═════════
Per unit value
SAR 75.40 ═════════
SAR 76.20 ═════════
SR 99.29 ═════════
Note ASSETS Bank balance Trading investments Other receivable
4
LIABILITY Accrued expenses
The accompanying notes 1 to 8 form part of these interim financial statements. 2
SAIB GCC Equity Income Fund STATEMENT OF OPERATIONS
Note INVESTMENT INCOME (LOSS) Trading income (loss), net
For the sixmonth period ended 30 June 2016 (Unaudited) SR
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
5
292,053 ─────────
(89,054) ─────────
EXPENSES Management fees Others
6
NET INCOME (LOSS) FROM OPERATIONS
8
(106,122) (108,319) ───────── (214,441) ───────── 77,612 ═════════
(50,505) (20,332) ───────── (70,837) ───────── (159,891) ═════════
The accompanying notes 1 to 8 form part of these interim financial statements. 3
SAIB GCC Equity Income Fund STATEMENT OF CASH FLOWS For the sixmonth period ended 30 June 2016 (Unaudited) SR OPERATING ACTIVITIES Net income (loss) from operations
77,612
Adjustment for: Movement in unrealised (gains) losses on trading investments Changes in operating assets and liability: Trading investments Other receivable Accrued expenses Net cash from (used in) operating activities FINANCING ACTIVITIES Value of units sold Value of units redeemed Dividend paid to unitholders Net cash (used in) from financing activities (DECREASE) / INCREASE 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
(1,116,174)
(159,891)
173,835
1,657,808 183,008 (24,133) ───────── 778,121 ─────────
(19,236,441) (589,975) 24,526 ───────── (19,837,946) ─────────
53,856 (1,567,852) (319,894) ───────── (1,833,890) ───────── (1,055,769)
24,038,760 (3,469,905) ───────── 20,568,855 ───────── 730,909
1,666,549 ───────── 610,780 ═════════
───────── 730,909 ═════════
529,633 ═════════
89,975 ═════════
The accompanying notes 1 to 8 form part of these interim financial statements. 4
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
SAIB GCC Equity Income Fund STATEMENT OF CHANGES IN NET ASSETS For the sixmonth period ended 30 June 2016 (Unaudited) SR
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
14,239,278 ─────────
─────────
77,612 ─────────
(159,891) ─────────
53,856 (1,567,852) ───────── (1,513,996) ───────── (319,894) ───────── 12,483,000 ═════════
24,038,760 (3,469,905) ───────── 20,568,855 ───────── ───────── 20,408,964 ═════════
For the sixmonth period ended 30 June 2016 (Unaudited) SR
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR
UNITS AT THE BEGINNING OF THE PERIOD
186,879 ─────────
─────────
Units sold Units redeemed
725 (22,047) ───────── (21,322) ───────── 165,557 ═════════
240,292 (34,738) ───────── 205,554 ───────── 205,554 ═════════
NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income (loss) 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 AT THE END OF THE PERIOD
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
Net (decrease) increase 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 2016 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) published by Capital Market Authority (CMA) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) 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 as follows: Accounting convention The 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 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 statement of operations.
6
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2016 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
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 ═════
6,565,260 1,267,958 1,157,503 783,341 3,383,169 ─────────
4,363,678 965,761 1,163,310 469,945 2,769,094 ─────────
35.11 7.77 9.36 3.78 22.28 ─────
13,157,231
9,731,788
78.31
1,694,192 894,006 ───────── 15,745,429
1,380,385 817,338 ───────── 11,929,511
11.11 6.58 ───── 95.99
500,000 ───────── 16,245,429 ═════════
498,365 ───────── 12,427,876 ═════════
4.01 ───── 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
31 December 2015 (Audited) Equity investments Kingdom of Saudi Arabia – Sectors: Cement Agriculture Telecommunication Petrochemical Others
Other Countries: Qatar Kuwait
Mutual Funds Investment: SAIB Sukuk Fund
7
SAIB GCC Equity Income Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 JUNE 2016 4.
TRADING INVESTMENTS (continued) Cost SR
Market value SR
% of market value
7,578,897 1,888,353 1,157,503 783,341 4,305,903 ───────── 15,713,999
7,352,125 1,914,967 1,143,250 768,355 4,383,013 ───────── 15,561,710
38.47 10.02 5.98 4.02 22.93 ───── 81.42
1,693,205 985,144 894,094 ───────── 19,286,441 ═════════
1,650,403 1,004,019 896,474 ───────── 19,112,606 ═════════
8.64 5.25 4.69 ───── 100.00 ═════
30 June 2015 (Unaudited) Equity investments Kingdom of Saudi Arabia – Sectors: Cement Agriculture Telecommunication Petrochemical Others
Other Countries: Qatar Kuwait United Arab Emirates
5
TRADING INCOME (LOSS), NET For the sixmonth period ended 30 June 2016 (Unaudited) SR
Realised losses Dividend income Movement in unrealised gains (losses)
6.
(1,375,262) 551,141 1,116,174 ──────── 292,053 ═════════
For the period from 27 April 2015 to 30 June 2015 (Unaudited) SR (5,194) 89,975 (173,835) ──────── (89,054) ═════════
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 2016. (2015: 30 June 2015). 8.
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results. 8
