SAIB Saudi Companies Fund
SAIB Saudi Companies Fund (Managed by Alistithmar for Financial Securities and Brokerage Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2017
SAIB Saudi Companies Fund INTERIM BALANCE SHEET As at 30 June 2017
Note
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
ASSETS Bank balance Trading investments Dividend receivable Other receivable
958,351 25,768,762 ───────── 26,727,113 ─────────
417,704 27,941,588 11,982 ───────── 28,371,274 ─────────
2,633,999 39,687,612 40,406 ───────── 42,362,017 ─────────
Accrued expenses
46,869 ─────────
68,772 ─────────
38,364 ─────────
NET ASSETS
26,680,244 ═════════
28,302,502 ═════════
42,323,653 ═════════
Units in issue
248,730 ═════════
252,224 ═════════
410,045 ═════════
Per unit value
SR 107.27 ═════════
SR 112.21 ═════════
SR 103.22 ═════════
4
LIABILITY
The accompanying notes 1 to 8 form part of these interim financial statements. 2
SAIB Saudi Companies Fund INTERIM STATEMENT OF OPERATIONS Six month period ended 30 June 2017 2017 (Unaudited) SR
2016 (Unaudited) SR
5
(970,513) ────────
1,885,584 ────────
Management fees Others
6
NET (LOSS) INCOME FROM OPERATIONS
8
(236,726) (33,633) ──────── (270,359) ──────── (1,240,872) ════════
(343,359) (34,560) ──────── (377,919) ──────── 1,507,665 ════════
Note INVESTMENT (LOSS) INCOME Trading (loss) income, net
EXPENSES
The accompanying notes 1 to 8 form part of these interim financial statements. 3
SAIB Saudi Companies Fund INTERIM STATEMENT OF CASH FLOWS Six month period ended 30 June 2017 2017 (Unaudited) SR
2016 (Unaudited) SR
(1,240,872)
1,507,665
OPERATING ACTIVITIES Net (loss) income from operations Adjustment for: Movement in unrealized losses (gains) on trading investments
Changes in operating assets and liability: Trading investments Dividend receivable Other receivable Accrued expenses Net cash from operating activities
627,729 ───────── (613,143)
(2,255,412) ───────── (747,747)
1,545,097 11,982 (21,903) ───────── 922,033 ─────────
1,918,471 554,278 (31,600) ───────── 1,693,402 ─────────
59,004 (440,390) ───────── (381,386) ─────────
138,600 (270,821) ───────── (132,221) ─────────
FINANCING ACTIVITIES Proceeds from units sold Value of units redeemed Net cash used in financing activities
540,647
1,561,181
417,704 ───────── 958,351 ═════════
1,072,818 ───────── 2,633,999 ═════════
568,660 ═════════
926,557 ═════════
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 Dividend received
The accompanying notes 1 to 8 form part of these interim financial statements. 4
SAIB Saudi Companies Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS VALUE AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net (loss) income from operations CHANGES FROM UNIT TRANSACTIONS Proceeds from units sold Value of units redeemed Net change from unit transactions NET ASSETS VALUE AT THE END OF THE PERIOD
2016 (Unaudited) SR
28,302,502 ─────────
40,948,209 ─────────
(1,240,872) ─────────
1,507,665 ─────────
59,004 (440,390) ───────── (381,386) ───────── 26,680,244 ═════════
138,600 (270,821) ───────── (132,221) ───────── 42,323,653 ═════════
2017 (Unaudited) Units
2016 (Unaudited) Units
252,224 ───────── 550 (4,044) ───────── (3,494) ─────────
411,643 ───────── 1,443 (3,041) ───────── (1,598) ─────────
248,730 ═════════
410,045 ═════════
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
UNITS AT THE BEGINNING OF THE PERIOD Units sold Units redeemed 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 Saudi Companies Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2017 1
GENERAL
SAIB Saudi Companies Fund (the Fund) is an open-ended investment fund created by an agreement between the Fund Manager and investors (the Unitholders) in the Fund. The Fund commenced operations on 23 April 2005. The Fund is designed for investors seeking capital appreciation, over the long term, through exposure to publicly traded Shariah compliant Saudi equities and financial products. All 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. 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 Unitholders 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 Saudi Companies 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
6,630,979 4,349,916 3,399,626 2,195,801 1,884,003 9,439,970 ───────── 27,900,295 ═════════
5,705,086 3,566,383 3,205,118 1,803,986 1,646,576 9,841,613 ───────── 25,768,762 ═════════
22.14 13.84 12.44 7.00 6.39 38.19 ────── 100.00 ══════
6,645,317 7,142,561 3,399,626 2,278,213 9,979,675 ─────── 29,445,392 ═══════
5,777,711 5,302,883 3,517,144 1,358,086 11,985,764 ─────── 27,941,588 ═══════
20.68 18.98 12.59 4.85 42.90 ───── 100.00 ═════
30 June 2017 (Unaudited) Equity investments (by sector) Petrochemical Banking Agriculture Retail Hotel & Tourism Others
31 December 2016 (Audited) Equity investments (by sector) Petrochemical Banking Agriculture Cement Others
30 June 2016 (Unaudited) Equity investments (by sector) Banking Petrochemical Agriculture Cement Telecommunication Others
10,671,915 7,457,408 5,157,497 4,920,212 672,293 17,988,350 ───────── 46,867,675 ═════════
7
7,272,099 5,207,570 5,073,381 3,088,618 721,168 18,324,776 ───────── 39,687,612 ═════════
18.32 13.12 12.78 7.78 1.82 46.18 ────── 100.00 ══════
SAIB Saudi Companies Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2017
5
TRADING (LOSS) INCOME, NET Six month period ended 30 June
Dividend income Movement in unrealised (losses) gains Realised losses
6
2017 (Unaudited) SR
2016 (Unaudited) SR
556,678 (627,729) (899,462) ───────── (970,513) ═════════
966,963 2,255,412 (1,336,791) ───────── 1,885,584 ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund paid a management fee calculated at an annual rate of 1.75% 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 0.40 % of net asset value per annum. Trade transactions on Tadawul 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: 30 June 2016).
8
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
8
SAIB Saudi Companies Fund INTERIM BALANCE SHEET As at 30 June 2017
Note
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
ASSETS Bank balance Trading investments Dividend receivable Other receivable
958,351 25,768,762 ───────── 26,727,113 ─────────
417,704 27,941,588 11,982 ───────── 28,371,274 ─────────
2,633,999 39,687,612 40,406 ───────── 42,362,017 ─────────
Accrued expenses
46,869 ─────────
68,772 ─────────
38,364 ─────────
NET ASSETS
26,680,244 ═════════
28,302,502 ═════════
42,323,653 ═════════
Units in issue
248,730 ═════════
252,224 ═════════
410,045 ═════════
Per unit value
SR 107.27 ═════════
SR 112.21 ═════════
SR 103.22 ═════════
4
LIABILITY
The accompanying notes 1 to 8 form part of these interim financial statements. 2
SAIB Saudi Companies Fund INTERIM STATEMENT OF OPERATIONS Six month period ended 30 June 2017 2017 (Unaudited) SR
2016 (Unaudited) SR
5
(970,513) ────────
1,885,584 ────────
Management fees Others
6
NET (LOSS) INCOME FROM OPERATIONS
8
(236,726) (33,633) ──────── (270,359) ──────── (1,240,872) ════════
(343,359) (34,560) ──────── (377,919) ──────── 1,507,665 ════════
Note INVESTMENT (LOSS) INCOME Trading (loss) income, net
EXPENSES
The accompanying notes 1 to 8 form part of these interim financial statements. 3
SAIB Saudi Companies Fund INTERIM STATEMENT OF CASH FLOWS Six month period ended 30 June 2017 2017 (Unaudited) SR
2016 (Unaudited) SR
(1,240,872)
1,507,665
OPERATING ACTIVITIES Net (loss) income from operations Adjustment for: Movement in unrealized losses (gains) on trading investments
Changes in operating assets and liability: Trading investments Dividend receivable Other receivable Accrued expenses Net cash from operating activities
627,729 ───────── (613,143)
(2,255,412) ───────── (747,747)
1,545,097 11,982 (21,903) ───────── 922,033 ─────────
1,918,471 554,278 (31,600) ───────── 1,693,402 ─────────
59,004 (440,390) ───────── (381,386) ─────────
138,600 (270,821) ───────── (132,221) ─────────
FINANCING ACTIVITIES Proceeds from units sold Value of units redeemed Net cash used in financing activities
540,647
1,561,181
417,704 ───────── 958,351 ═════════
1,072,818 ───────── 2,633,999 ═════════
568,660 ═════════
926,557 ═════════
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 Dividend received
The accompanying notes 1 to 8 form part of these interim financial statements. 4
SAIB Saudi Companies Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS VALUE AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net (loss) income from operations CHANGES FROM UNIT TRANSACTIONS Proceeds from units sold Value of units redeemed Net change from unit transactions NET ASSETS VALUE AT THE END OF THE PERIOD
2016 (Unaudited) SR
28,302,502 ─────────
40,948,209 ─────────
(1,240,872) ─────────
1,507,665 ─────────
59,004 (440,390) ───────── (381,386) ───────── 26,680,244 ═════════
138,600 (270,821) ───────── (132,221) ───────── 42,323,653 ═════════
2017 (Unaudited) Units
2016 (Unaudited) Units
252,224 ───────── 550 (4,044) ───────── (3,494) ─────────
411,643 ───────── 1,443 (3,041) ───────── (1,598) ─────────
248,730 ═════════
410,045 ═════════
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
UNITS AT THE BEGINNING OF THE PERIOD Units sold Units redeemed 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 Saudi Companies Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2017 1
GENERAL
SAIB Saudi Companies Fund (the Fund) is an open-ended investment fund created by an agreement between the Fund Manager and investors (the Unitholders) in the Fund. The Fund commenced operations on 23 April 2005. The Fund is designed for investors seeking capital appreciation, over the long term, through exposure to publicly traded Shariah compliant Saudi equities and financial products. All 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. 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 Unitholders 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 Saudi Companies 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
6,630,979 4,349,916 3,399,626 2,195,801 1,884,003 9,439,970 ───────── 27,900,295 ═════════
5,705,086 3,566,383 3,205,118 1,803,986 1,646,576 9,841,613 ───────── 25,768,762 ═════════
22.14 13.84 12.44 7.00 6.39 38.19 ────── 100.00 ══════
6,645,317 7,142,561 3,399,626 2,278,213 9,979,675 ─────── 29,445,392 ═══════
5,777,711 5,302,883 3,517,144 1,358,086 11,985,764 ─────── 27,941,588 ═══════
20.68 18.98 12.59 4.85 42.90 ───── 100.00 ═════
30 June 2017 (Unaudited) Equity investments (by sector) Petrochemical Banking Agriculture Retail Hotel & Tourism Others
31 December 2016 (Audited) Equity investments (by sector) Petrochemical Banking Agriculture Cement Others
30 June 2016 (Unaudited) Equity investments (by sector) Banking Petrochemical Agriculture Cement Telecommunication Others
10,671,915 7,457,408 5,157,497 4,920,212 672,293 17,988,350 ───────── 46,867,675 ═════════
7
7,272,099 5,207,570 5,073,381 3,088,618 721,168 18,324,776 ───────── 39,687,612 ═════════
18.32 13.12 12.78 7.78 1.82 46.18 ────── 100.00 ══════
SAIB Saudi Companies Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2017
5
TRADING (LOSS) INCOME, NET Six month period ended 30 June
Dividend income Movement in unrealised (losses) gains Realised losses
6
2017 (Unaudited) SR
2016 (Unaudited) SR
556,678 (627,729) (899,462) ───────── (970,513) ═════════
966,963 2,255,412 (1,336,791) ───────── 1,885,584 ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund paid a management fee calculated at an annual rate of 1.75% 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 0.40 % of net asset value per annum. Trade transactions on Tadawul 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: 30 June 2016).
8
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
8
