SAIB Sukuk Fund
SAIB Sukuk Fund (Managed by Alistithmar for Financial Securities and Brokerage Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2017
SAIB Sukuk 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 75,509 16,199,109 88,432 4,113,707 ───────── 20,476,757 ─────────
489,774 12,100,000 8,037,539 107,098 ───────── 20,734,411 ─────────
12,391,098 11,919,385 90,717 ───────── 24,401,200 ─────────
Accrued expenses
60,631 ─────────
94,493 ─────────
67,698 ─────────
NET ASSETS
20,416,126 ═════════
20,639,918 ═════════
24,333,502 ═════════
Units in issue
187,660 ═════════
191,056 ═════════
226,456 ═════════
Per unit value
SR 108.79 ═════════
SR 108.03 ═════════
SR 107.45 ═════════
Cash and cash equivalents Money market placements Trading investments Accrued income Other receivable
4 5 6
LIABILITY
The accompanying notes 1 to 10 form part of these interim financial statements. 2
SAIB Sukuk Fund INTERIM STATEMENT OF OPERATIONS Six month period ended 30 June 2017 Note
2017 (Unaudited) SR
2016 (Unaudited) SR
INVESTMENT INCOME Special commission income Trading (loss) income, net
7
284,341 (1,745) ───────── 282,596 ─────────
250,625 97,085 ───────── 347,710 ─────────
(54,433) (82,689) ───────── (137,122) ─────────
(87,489) (82,526) ───────── (170,015) ─────────
145,474 ═════════
177,695 ═════════
EXPENSES Management fees Others
8
NET INCOME FROM OPERATIONS
The accompanying notes 1 to 10 form part of these interim financial statements. 3
SAIB Sukuk Fund INTERIM STATEMENT OF CASH FLOWS Six month period ended 30 June 2017
Note
2017 (Unaudited) SR
2016 (Unaudited) SR
OPERATING ACTIVITIES Net income from operations
145,474
Adjustment for: Movement in unrealized losses (gains) on trading investment
Changes in operating assets and liability: Money market placements Trading investments Accrued income Other receivable Accrued expenses Net cash (used in) from operating activities
177,695
1,745 ───────── 147,219
(58,393) ───────── 119,301
12,100,000 (8,163,315) 18,666 (4,113,707) (33,862) ───────── (44,999) ─────────
8,155,183 37,252 (68,830) ───────── 8,242,907 ─────────
(369,266) ───────── (369,266) ─────────
(1,624,506) ───────── (1,624,506) ─────────
FINANCING ACTIVITY Value of units redeemed Net cash used in financing activity
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(414,265)
Cash and cash equivalents at the beginning of the period
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Operational cash flows from special commission income Special commission income
The accompanying notes 1 to 10 form part of these interim financial statements. 4
4
6,618,401
489,774 ─────────
5,772,697 ─────────
75,509 ═════════
12,391,098 ═════════
303,007 ═════════
287,877 ═════════
SAIB Sukuk Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD
2016 (Unaudited) SR
20,639,918 ─────────
25,780,313 ─────────
145,474 ─────────
177,695 ─────────
(369,266) ───────── (369,266) ─────────
(1,624,506) ───────── (1,624,506) ─────────
20,416,126 ═════════
24,333,502 ═════════
CHANGES FROM OPERTIONS Net income from operations CHANGES FROM UNIT TRANSACTIONS Value of units redeemed Net change from unit transactions
NET ASSETS AT THE END OF THE PERIOD
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
UNITS AT THE BEGINNING OF THE PERIOD Units redeemed Net decrease in units
UNITS AT THE END OF THE PERIOD
2017 (Unaudited) Units
2016 (Unaudited) Units
191,056 ──────── (3,396) ──────── (3,396) ────────
241,603 ──────── (15,147) ──────── (15,147) ────────
187,660 ═════════
The accompanying notes 1 to 10 form part of these interim financial statements. 5
226,456 ═════════
SAIB Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2017 1
GENERAL
SAIB Sukuk 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 6 April 2011. The objective of the Fund is to achieve medium to long-term capital growth through investing in a diversified portfolio of GCC based sukuk issues, sukuk funds, murabaha placements and other short-term instruments. All income is reinvested in the Fund and is reflected in the unit price. The Fund Manager has entered into arrangements with HSBC Saudi Arabia as an administrator and custodian on behalf of the Fund. Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital), wholly owned subsidiary of the Saudi Investment Bank (The Bank) is the Fund Manager of the Fund. The books and records of the Fund are maintained in Saudi Riyal (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 unrealized gains (losses) from changes in fair value, realized gains (losses) from sale of trading investments and dividends from trading investments. Realized gains (losses) on trading investments sold are determined on a weighted average cost basis. Dividend income is recognized when declared (i.e. when the Fund’s right to receive the dividend is established). Special commission income is recognized on an effective yield basis. Investment valuation Money market placements are carried at cost. Investments in Sukuk, 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. Cash and cash equivalents Cash and cash equivalents consists of bank balances, cash on hand, and investments that are readily convertible into known amounts of cash and have a maturity of three months or less when purchased. Investment transactions Investments 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.
6
SAIB Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2017 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
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. 4
CASH AND CASH EQUIVALENTS
Bank balances Money market placements with an original maturity of three months or less
5
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
75,509 ───────── 75,509 ═════════
489,774 ───────── 489,774 ═════════
2,791,098 9,600,000 ───────── 12,391,098 ═════════
MONEY MARKET PLACEMENTS
Money market placements comprise placements with commercial banks with minimum of investment grade credit rating and have an original maturity of more than three months from date of placement. The average variable special commission rate on the placement as at 30 June 2017 is based on the market rate. 6
TRADING INVESTMENTS
The composition of the investment portfolio on the balance sheet date is summarised below: Cost SR
Market value SR
% of market Value
30 June 2017 (Unaudited) Sukuk: KSA Sukuk Ltd Sharjah Islamic Bank Co Ltd DIB Sukuk Ltd Saudi Electricity Ooredoo Tamweel Qatar Islamic Bank Sipchem IDB Trust Servies Ltd Mutual Funds: Sanbullah Riyal Fund
3,007,620 2,017,814 1,905,695 1,603,165 1,431,029 1,271,983 1,000,000 794,715 ───────── 13,032,021
3,015,042 2,020,640 1,903,151 1,590,022 1,387,519 1,243,142 1,000,000 788,495 ───────── 12,948,011
18.61 12.47 11.75 9.82 8.57 7.67 6.17 4.87 ───── 79.93
3,250,000 ───────── 16,282,021 ═════════
3,251,098 ───────── 16,199,109 ═════════
20.07 ───── 100.00 ═════
2,017,814 1,603,165 1,431,029 1,271,983 1,000,000 794,715 ───────── 8,118,706 ═════════
1,991,436 1,585,217 1,409,061 1,262,922 1,000,000 788,903 ───────── 8,037,539 ═════════
31 December 2016 (Audited) Sukuk: Sharjah Islamic Bank Co Ltd Saudi Electricity Ooredoo Tamweel Qatar Islamic Bank Sipchem IDB Trust Servies Ltd
7
24.78 19.72 17.53 15.71 12.44 9.82 ───────── 100.00 ════════
SAIB Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2017 6
TRADING INVESTMENTS (continued) Cost SR
Market value SR
% of market Value
2,182,327 2,017,814 1,603,165 1,431,030 1,271,983 1,000,000 ───────── 9,506,319
2,188,976 2,020,854 1,571,584 1,417,286 1,276,865 1,000,000 ───────── 9,475,565
18.36 16.95 13.19 11.89 10.71 8.39 ───── 79.50
2,355,946 ───────── 11,862,265 ═════════
2,443,820 ───────── 11,919,385 ═════════
20.50 ───── 100.00 ═════
30 June 2016 (Unaudited) Sukuk: IDB Trust Servies Ltd SIB Sukuk Co Ltd Saudi Electricity Company – Sukuk Qatar Telecommunication Qatar Islamic Bank – Sukuk Sipchem Mutual Funds: Falcom SAR Murabaha Fund
7
TRADING (LOSS) INCOME, NET Six month period ended 30 June 2017 (Unaudited) SR
Movement in unrealised (losses) gains Realised gains
8
(1,745) ───────── (1,745) ═════════
2016 (Unaudited) SR 58,393 38,692 ───────── 97,085 ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund pays a management fee calculated at an annual rate of 1% 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. The Fund pays to HSBC Saudi Arabia a custody fee at 0.05% and an administration fee at 0.08% per annum of the net asset value of the Fund calculated on twice monthly basis, subject to a monthly minimum charge of SR 3,750 each per month. Other operating expenses are paid by the Fund Manager on behalf of the Fund are reimbursed from the Fund. Total expense ratio shall not exceed 1.30% per annum of the net asset value including management fee, custodian fee, administration fee and other operating expenses. The Bank and The Saudi British Bank acts as the Fund’s bankers. 9
LAST VALUATION DAY
The last valuation day of the period was 30 June 2017 (2016: 30 June 2016). 10
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
8
SAIB Sukuk 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 75,509 16,199,109 88,432 4,113,707 ───────── 20,476,757 ─────────
489,774 12,100,000 8,037,539 107,098 ───────── 20,734,411 ─────────
12,391,098 11,919,385 90,717 ───────── 24,401,200 ─────────
Accrued expenses
60,631 ─────────
94,493 ─────────
67,698 ─────────
NET ASSETS
20,416,126 ═════════
20,639,918 ═════════
24,333,502 ═════════
Units in issue
187,660 ═════════
191,056 ═════════
226,456 ═════════
Per unit value
SR 108.79 ═════════
SR 108.03 ═════════
SR 107.45 ═════════
Cash and cash equivalents Money market placements Trading investments Accrued income Other receivable
4 5 6
LIABILITY
The accompanying notes 1 to 10 form part of these interim financial statements. 2
SAIB Sukuk Fund INTERIM STATEMENT OF OPERATIONS Six month period ended 30 June 2017 Note
2017 (Unaudited) SR
2016 (Unaudited) SR
INVESTMENT INCOME Special commission income Trading (loss) income, net
7
284,341 (1,745) ───────── 282,596 ─────────
250,625 97,085 ───────── 347,710 ─────────
(54,433) (82,689) ───────── (137,122) ─────────
(87,489) (82,526) ───────── (170,015) ─────────
145,474 ═════════
177,695 ═════════
EXPENSES Management fees Others
8
NET INCOME FROM OPERATIONS
The accompanying notes 1 to 10 form part of these interim financial statements. 3
SAIB Sukuk Fund INTERIM STATEMENT OF CASH FLOWS Six month period ended 30 June 2017
Note
2017 (Unaudited) SR
2016 (Unaudited) SR
OPERATING ACTIVITIES Net income from operations
145,474
Adjustment for: Movement in unrealized losses (gains) on trading investment
Changes in operating assets and liability: Money market placements Trading investments Accrued income Other receivable Accrued expenses Net cash (used in) from operating activities
177,695
1,745 ───────── 147,219
(58,393) ───────── 119,301
12,100,000 (8,163,315) 18,666 (4,113,707) (33,862) ───────── (44,999) ─────────
8,155,183 37,252 (68,830) ───────── 8,242,907 ─────────
(369,266) ───────── (369,266) ─────────
(1,624,506) ───────── (1,624,506) ─────────
FINANCING ACTIVITY Value of units redeemed Net cash used in financing activity
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(414,265)
Cash and cash equivalents at the beginning of the period
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Operational cash flows from special commission income Special commission income
The accompanying notes 1 to 10 form part of these interim financial statements. 4
4
6,618,401
489,774 ─────────
5,772,697 ─────────
75,509 ═════════
12,391,098 ═════════
303,007 ═════════
287,877 ═════════
SAIB Sukuk Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD
2016 (Unaudited) SR
20,639,918 ─────────
25,780,313 ─────────
145,474 ─────────
177,695 ─────────
(369,266) ───────── (369,266) ─────────
(1,624,506) ───────── (1,624,506) ─────────
20,416,126 ═════════
24,333,502 ═════════
CHANGES FROM OPERTIONS Net income from operations CHANGES FROM UNIT TRANSACTIONS Value of units redeemed Net change from unit transactions
NET ASSETS AT THE END OF THE PERIOD
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
UNITS AT THE BEGINNING OF THE PERIOD Units redeemed Net decrease in units
UNITS AT THE END OF THE PERIOD
2017 (Unaudited) Units
2016 (Unaudited) Units
191,056 ──────── (3,396) ──────── (3,396) ────────
241,603 ──────── (15,147) ──────── (15,147) ────────
187,660 ═════════
The accompanying notes 1 to 10 form part of these interim financial statements. 5
226,456 ═════════
SAIB Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2017 1
GENERAL
SAIB Sukuk 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 6 April 2011. The objective of the Fund is to achieve medium to long-term capital growth through investing in a diversified portfolio of GCC based sukuk issues, sukuk funds, murabaha placements and other short-term instruments. All income is reinvested in the Fund and is reflected in the unit price. The Fund Manager has entered into arrangements with HSBC Saudi Arabia as an administrator and custodian on behalf of the Fund. Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital), wholly owned subsidiary of the Saudi Investment Bank (The Bank) is the Fund Manager of the Fund. The books and records of the Fund are maintained in Saudi Riyal (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 unrealized gains (losses) from changes in fair value, realized gains (losses) from sale of trading investments and dividends from trading investments. Realized gains (losses) on trading investments sold are determined on a weighted average cost basis. Dividend income is recognized when declared (i.e. when the Fund’s right to receive the dividend is established). Special commission income is recognized on an effective yield basis. Investment valuation Money market placements are carried at cost. Investments in Sukuk, 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. Cash and cash equivalents Cash and cash equivalents consists of bank balances, cash on hand, and investments that are readily convertible into known amounts of cash and have a maturity of three months or less when purchased. Investment transactions Investments 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.
6
SAIB Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2017 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
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. 4
CASH AND CASH EQUIVALENTS
Bank balances Money market placements with an original maturity of three months or less
5
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
75,509 ───────── 75,509 ═════════
489,774 ───────── 489,774 ═════════
2,791,098 9,600,000 ───────── 12,391,098 ═════════
MONEY MARKET PLACEMENTS
Money market placements comprise placements with commercial banks with minimum of investment grade credit rating and have an original maturity of more than three months from date of placement. The average variable special commission rate on the placement as at 30 June 2017 is based on the market rate. 6
TRADING INVESTMENTS
The composition of the investment portfolio on the balance sheet date is summarised below: Cost SR
Market value SR
% of market Value
30 June 2017 (Unaudited) Sukuk: KSA Sukuk Ltd Sharjah Islamic Bank Co Ltd DIB Sukuk Ltd Saudi Electricity Ooredoo Tamweel Qatar Islamic Bank Sipchem IDB Trust Servies Ltd Mutual Funds: Sanbullah Riyal Fund
3,007,620 2,017,814 1,905,695 1,603,165 1,431,029 1,271,983 1,000,000 794,715 ───────── 13,032,021
3,015,042 2,020,640 1,903,151 1,590,022 1,387,519 1,243,142 1,000,000 788,495 ───────── 12,948,011
18.61 12.47 11.75 9.82 8.57 7.67 6.17 4.87 ───── 79.93
3,250,000 ───────── 16,282,021 ═════════
3,251,098 ───────── 16,199,109 ═════════
20.07 ───── 100.00 ═════
2,017,814 1,603,165 1,431,029 1,271,983 1,000,000 794,715 ───────── 8,118,706 ═════════
1,991,436 1,585,217 1,409,061 1,262,922 1,000,000 788,903 ───────── 8,037,539 ═════════
31 December 2016 (Audited) Sukuk: Sharjah Islamic Bank Co Ltd Saudi Electricity Ooredoo Tamweel Qatar Islamic Bank Sipchem IDB Trust Servies Ltd
7
24.78 19.72 17.53 15.71 12.44 9.82 ───────── 100.00 ════════
SAIB Sukuk Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2017 6
TRADING INVESTMENTS (continued) Cost SR
Market value SR
% of market Value
2,182,327 2,017,814 1,603,165 1,431,030 1,271,983 1,000,000 ───────── 9,506,319
2,188,976 2,020,854 1,571,584 1,417,286 1,276,865 1,000,000 ───────── 9,475,565
18.36 16.95 13.19 11.89 10.71 8.39 ───── 79.50
2,355,946 ───────── 11,862,265 ═════════
2,443,820 ───────── 11,919,385 ═════════
20.50 ───── 100.00 ═════
30 June 2016 (Unaudited) Sukuk: IDB Trust Servies Ltd SIB Sukuk Co Ltd Saudi Electricity Company – Sukuk Qatar Telecommunication Qatar Islamic Bank – Sukuk Sipchem Mutual Funds: Falcom SAR Murabaha Fund
7
TRADING (LOSS) INCOME, NET Six month period ended 30 June 2017 (Unaudited) SR
Movement in unrealised (losses) gains Realised gains
8
(1,745) ───────── (1,745) ═════════
2016 (Unaudited) SR 58,393 38,692 ───────── 97,085 ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund pays a management fee calculated at an annual rate of 1% 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. The Fund pays to HSBC Saudi Arabia a custody fee at 0.05% and an administration fee at 0.08% per annum of the net asset value of the Fund calculated on twice monthly basis, subject to a monthly minimum charge of SR 3,750 each per month. Other operating expenses are paid by the Fund Manager on behalf of the Fund are reimbursed from the Fund. Total expense ratio shall not exceed 1.30% per annum of the net asset value including management fee, custodian fee, administration fee and other operating expenses. The Bank and The Saudi British Bank acts as the Fund’s bankers. 9
LAST VALUATION DAY
The last valuation day of the period was 30 June 2017 (2016: 30 June 2016). 10
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
8
