SAIB Trade Finance Fund
SAIB Trade Finance Fund (Managed by Alistithmar for Financial Securities and Brokerage Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2016
SAIB Trade Finance Fund BALANCE SHEET As at 30 June 2016
30 June 2016 (Unaudited) SR
Note ASSETS Bank balance Money market placements Held to maturity investments Trading investments Accrued income Other receivable
4 5 6
LIABILITIES Risk allowance Accrued expenses
8
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
7,988,185 349,957,224 145,961,590 45,134,963 4,217,622 200,044 ───────── 553,459,628 ─────────
22,212,328 648,491,311 201,778,340 1,381,094 5,571,143 207,334 ───────── 879,641,550 ─────────
23,392,373 672,555,986 295,388,624 167,841,860 4,078,636 150,187 ───────── 1,163,407,666 ─────────
4,437,702 1,053,239 ───────── 5,490,941 ─────────
3,970,292 865,676 ───────── 4,835,968 ─────────
3,239,212 1,412,570 ───────── 4,651,782 ─────────
NET ASSETS
547,968,687 ═══════════
874,805,582 ═══════════
1,158,755,884 ═══════════
Units in issue
41,913,180 ═══════════
67,337,345 ═══════════
89,646,066 ═══════════
Per unit value
SR 13.07 ═══════════
SR 12.99 ═══════════
SR 12.93 ═══════════
The accompanying notes 1 to 10 form part of these interim financial statements. 2
SAIB Trade Finance Fund STATEMENT OF OPERATIONS Six month period ended 30 June 2016
Note INVESTMENT INCOME Special commission income Trading income
7
EXPENSES Management fees Risk allowance Service charges Others expenses
8 8 8
NET INCOME FROM OPERATIONS
10
The accompanying notes 1 to 10 form part of these interim financial statements. 3
2016 (Unaudited) SR
2015 (Unaudited) SR
6,181,064 387,450 ───────── 6,568,514 ─────────
8,554,966 752,217 ───────── 9,307,183 ─────────
(1,756,496) (467,409) (21,160) (158,771) ───────── (2,403,836) ───────── 4,164,678 ═════════
(2,738,428) (586,884) (14,803) (671,559) ───────── (4,011,674) ───────── 5,295,509 ═════════
SAIB Trade Finance Fund STATEMENT OF CASH FLOWS Six month period ended 30 June 2016
OPERATING ACTIVITIES Net income from operations Adjustment for: Movement in unrealized gains on trading investments
Changes in operating assets and liabilities: Money market placements, net Held to maturity investments Trading investments Accrued income Other receivable Risk allowance Accrued expenses Net cash from (used in) operating activities FINANCING ACTIVITIES Proceed from units sold Value of units redeemed 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 special commission income Special commission income received
The accompanying notes 1 to 10 form part of these interim financial statements. 4
2016 (Unaudited) SR
2015 (Unaudited) SR
4,164,678
5,295,509
(250,295) ───────── 3,914,383
(112,844) ───────── 5,182,665
298,534,087 55,816,750 (43,503,574) 1,353,521 7,290 467,410 187,563 ───────── 316,777,430 ─────────
(194,663,012) (4,735,676) (21,239,373) (1,166,960) 17,845,602 586,884 532,840 ───────── (197,657,030) ─────────
118,974,647 (449,976,221) ───────── (331,001,573) ───────── (14,224,143)
393,100,485 (448,140,758) ───────── (55,040,273) ───────── (252,697,303)
22,212,328 ───────── 7,988,185 ═════════
276,089,676 ───────── 23,392,373 ═════════
7,534,585 ═════════
7,388,006 ═════════
SAIB Trade Finance Fund STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2016
2016 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income from operations CHANGES FROM UNIT TRANSACTIONS Proceeds from units sold Value of units redeemed Net change from unit transactions NET ASSETS AT THE END OF THE PERIOD
2015 (Unaudited) SR
874,805,582 ─────────
1,208,500,648 ─────────
4,164,678 ─────────
5,295,509 ─────────
118,974,647 (449,976,221) ───────── (331,001,573) ───────── 547,968,687 ═════════
393,100,485 (448,140,758) ───────── (55,040,273) ───────── 1,158,755,884 ═════════
2016 Unaudited Units
2015 (Unaudited) Units
67,337,345 ───────── 9,135,995 (34,560,160) ───────── (25,424,166) ───────── 41,913,180 ═════════
93,944,243 ───────── 30,467,222 (34,765,399) ───────── (4,298,177) ───────── 89,646,066 ═════════
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 10 form part of these interim financial statements. 5
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2016 1
GENERAL
SAIB Trade Finance 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 30 June 2003. The Fund is designed for investors seeking capital preservation and high liquidity through exposure to Shariah compliant assets. 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) 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 consistent with those used and disclosed in the annual financial statements for the year ended 31 December 2015 and 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 Special commission income is recognised on an effective yield basis. 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. Other income is recognized when earned. Investment valuation Money market placements are carried at cost. 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. Investments that are bought with the intention of being held to maturity are carried at cost (adjusted for any premium or discount on an effective yield basis), less permanent decline in value. 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 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. Cash and cash equivalents For the purposes of cash flow statement, cash and cash equivalents consist of bank balances and money market placements with an original maturity of three months or less. 6
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2016 4
MONEY MARKET PLACEMENTS
The composition of the money market placements on the last valuation day of the period is summarised below:
Murabaha placements with other banks Murabaha car financing placement with the Bank
5
30 June 2016 (Unaudited) SR
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
349,184,043 773,181 ───────── 349,957,224 ═════════
647,800,400 690,911 ───────── 648,491,311 ═════════
671,800,400 755,586 ───────── 672,555,986 ═════════
30 June 2016 (Unaudited) SR
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
56,951,250 33,806,484 12,152,699 12,113,809 9,390,000 8,812,973 7,734,375 5,000,000 ───────── 145,961,590 ═════════
74,124,375 33,806,484 12,152,699 12,113,809 9,390,000 13,875,660 7,734,375 5,400,000 22,488,750 6,261,563 2,250,000 2,180,625 ───────── 201,778,340 ═════════
24,340,078 12,152,699 12,113,809 49,485,750 69,410,466 24,707,813 5,400,000 2,459,438 24,790,406 2,250,000 2,180,625 30,000,000 18,854,286 11,596,884 5,646,370 ───────── 295,388,624 ═════════
HELD TO MATURITY INVESTMENTS
Sukuk: Saudi Electricity Company Goldemen Sacks Saudi British Bank Saudi Hollandi Bank Sharjah Islamic Bank Qatar Telecommunications Emaar Spichem Qatar Islamic Bank Emirates Islamic Bank Islamic Development Bank HBME Saudi Binladen Group Abu Dhabi Islamic Bank First Gulf Bank Emirates Airline
7
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2016
6
TRADING INVESTMENTS Cost SR
Market value SR
% of market Value
30 June 2016 (Unaudited) Mutual funds Falcom SAR Murabaha Fund Al-Sunbullah Riyal Fund Al Awal Capital Murabaha SAR Fund
20,037,726 15,051,575 9,800,000 ───────── 44,889,301 ═════════
20,183,366 15,096,908 9,854,689 ───────── 45,134,963 ═════════
44.72 33.45 21.83 ───── 100.00 ═════
1,300,000 84,015 1,712 ───────── 1,385,727 ═════════
1,295,209 84,139 1,746 ───────── 1,381,094 ═════════
93.78 6.09 0.13 ───── 100.00 ═════
98,961,306 57,458,336 10,000,000 ───────── 166,419,642 ═════════
99,278,168 58,339,943 10,223,749 ───────── 167,841,860 ═════════
59.15 34.76 6.09 ───── 100.00 ═════
31 December 2015 (Audited) Mutual funds SAIB Sukuk Fund Al Rajhi Commodities Mudaraba Fund-SAR Falcom SAR Murabaha Fund
30 June 2015 (Unaudited) Mutual funds Al Rajhi Commodities Mudaraba Fund – SAR Falcom SAR Murabaha Fund MEFIC Murabaha Fund
7
TRADING INCOME Six month period ended 30 June 2015 2016 (Unaudited) (Unaudited) SR SR
Movement in unrealized gains Realised gains
250,295 137,155 ───────── 387,450 ═════════
8
112,844 639,373 ───────── 752,217 ═════════
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2016
8
TRANSACTIONS WITH RELATED PARTIES
The Fund pays a management fee calculated at an annual rate of 0.50% 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 0.20% of net asset value per annum. At each valuation date, the Fund pays to the Bank service charges annually at 5.5% of the Fund’s car financing placements with the Bank. The Fund calculates a risk allowance at an annual rate of 10% of net income from operations at each valuation date. The risk allowance is in respect of the credit risk on Fund’s assets. The risk allowance reflected in the statement of operations represents the allowance charged during the period. The Bank acts as the Fund’s banker. 9
LAST VALUATION DAY
The last valuation day of the period was 30 June 2016 (2015: 30 June 2015). 10
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
9
SAIB Trade Finance Fund BALANCE SHEET As at 30 June 2016
30 June 2016 (Unaudited) SR
Note ASSETS Bank balance Money market placements Held to maturity investments Trading investments Accrued income Other receivable
4 5 6
LIABILITIES Risk allowance Accrued expenses
8
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
7,988,185 349,957,224 145,961,590 45,134,963 4,217,622 200,044 ───────── 553,459,628 ─────────
22,212,328 648,491,311 201,778,340 1,381,094 5,571,143 207,334 ───────── 879,641,550 ─────────
23,392,373 672,555,986 295,388,624 167,841,860 4,078,636 150,187 ───────── 1,163,407,666 ─────────
4,437,702 1,053,239 ───────── 5,490,941 ─────────
3,970,292 865,676 ───────── 4,835,968 ─────────
3,239,212 1,412,570 ───────── 4,651,782 ─────────
NET ASSETS
547,968,687 ═══════════
874,805,582 ═══════════
1,158,755,884 ═══════════
Units in issue
41,913,180 ═══════════
67,337,345 ═══════════
89,646,066 ═══════════
Per unit value
SR 13.07 ═══════════
SR 12.99 ═══════════
SR 12.93 ═══════════
The accompanying notes 1 to 10 form part of these interim financial statements. 2
SAIB Trade Finance Fund STATEMENT OF OPERATIONS Six month period ended 30 June 2016
Note INVESTMENT INCOME Special commission income Trading income
7
EXPENSES Management fees Risk allowance Service charges Others expenses
8 8 8
NET INCOME FROM OPERATIONS
10
The accompanying notes 1 to 10 form part of these interim financial statements. 3
2016 (Unaudited) SR
2015 (Unaudited) SR
6,181,064 387,450 ───────── 6,568,514 ─────────
8,554,966 752,217 ───────── 9,307,183 ─────────
(1,756,496) (467,409) (21,160) (158,771) ───────── (2,403,836) ───────── 4,164,678 ═════════
(2,738,428) (586,884) (14,803) (671,559) ───────── (4,011,674) ───────── 5,295,509 ═════════
SAIB Trade Finance Fund STATEMENT OF CASH FLOWS Six month period ended 30 June 2016
OPERATING ACTIVITIES Net income from operations Adjustment for: Movement in unrealized gains on trading investments
Changes in operating assets and liabilities: Money market placements, net Held to maturity investments Trading investments Accrued income Other receivable Risk allowance Accrued expenses Net cash from (used in) operating activities FINANCING ACTIVITIES Proceed from units sold Value of units redeemed 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 special commission income Special commission income received
The accompanying notes 1 to 10 form part of these interim financial statements. 4
2016 (Unaudited) SR
2015 (Unaudited) SR
4,164,678
5,295,509
(250,295) ───────── 3,914,383
(112,844) ───────── 5,182,665
298,534,087 55,816,750 (43,503,574) 1,353,521 7,290 467,410 187,563 ───────── 316,777,430 ─────────
(194,663,012) (4,735,676) (21,239,373) (1,166,960) 17,845,602 586,884 532,840 ───────── (197,657,030) ─────────
118,974,647 (449,976,221) ───────── (331,001,573) ───────── (14,224,143)
393,100,485 (448,140,758) ───────── (55,040,273) ───────── (252,697,303)
22,212,328 ───────── 7,988,185 ═════════
276,089,676 ───────── 23,392,373 ═════════
7,534,585 ═════════
7,388,006 ═════════
SAIB Trade Finance Fund STATEMENT OF CHANGES IN NET ASSETS Six month period ended 30 June 2016
2016 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD CHANGES FROM OPERATIONS Net income from operations CHANGES FROM UNIT TRANSACTIONS Proceeds from units sold Value of units redeemed Net change from unit transactions NET ASSETS AT THE END OF THE PERIOD
2015 (Unaudited) SR
874,805,582 ─────────
1,208,500,648 ─────────
4,164,678 ─────────
5,295,509 ─────────
118,974,647 (449,976,221) ───────── (331,001,573) ───────── 547,968,687 ═════════
393,100,485 (448,140,758) ───────── (55,040,273) ───────── 1,158,755,884 ═════════
2016 Unaudited Units
2015 (Unaudited) Units
67,337,345 ───────── 9,135,995 (34,560,160) ───────── (25,424,166) ───────── 41,913,180 ═════════
93,944,243 ───────── 30,467,222 (34,765,399) ───────── (4,298,177) ───────── 89,646,066 ═════════
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 10 form part of these interim financial statements. 5
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS 30 June 2016 1
GENERAL
SAIB Trade Finance 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 30 June 2003. The Fund is designed for investors seeking capital preservation and high liquidity through exposure to Shariah compliant assets. 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) 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 consistent with those used and disclosed in the annual financial statements for the year ended 31 December 2015 and 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 Special commission income is recognised on an effective yield basis. 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. Other income is recognized when earned. Investment valuation Money market placements are carried at cost. 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. Investments that are bought with the intention of being held to maturity are carried at cost (adjusted for any premium or discount on an effective yield basis), less permanent decline in value. 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 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. Cash and cash equivalents For the purposes of cash flow statement, cash and cash equivalents consist of bank balances and money market placements with an original maturity of three months or less. 6
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2016 4
MONEY MARKET PLACEMENTS
The composition of the money market placements on the last valuation day of the period is summarised below:
Murabaha placements with other banks Murabaha car financing placement with the Bank
5
30 June 2016 (Unaudited) SR
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
349,184,043 773,181 ───────── 349,957,224 ═════════
647,800,400 690,911 ───────── 648,491,311 ═════════
671,800,400 755,586 ───────── 672,555,986 ═════════
30 June 2016 (Unaudited) SR
31 December 2015 (Audited) SR
30 June 2015 (Unaudited) SR
56,951,250 33,806,484 12,152,699 12,113,809 9,390,000 8,812,973 7,734,375 5,000,000 ───────── 145,961,590 ═════════
74,124,375 33,806,484 12,152,699 12,113,809 9,390,000 13,875,660 7,734,375 5,400,000 22,488,750 6,261,563 2,250,000 2,180,625 ───────── 201,778,340 ═════════
24,340,078 12,152,699 12,113,809 49,485,750 69,410,466 24,707,813 5,400,000 2,459,438 24,790,406 2,250,000 2,180,625 30,000,000 18,854,286 11,596,884 5,646,370 ───────── 295,388,624 ═════════
HELD TO MATURITY INVESTMENTS
Sukuk: Saudi Electricity Company Goldemen Sacks Saudi British Bank Saudi Hollandi Bank Sharjah Islamic Bank Qatar Telecommunications Emaar Spichem Qatar Islamic Bank Emirates Islamic Bank Islamic Development Bank HBME Saudi Binladen Group Abu Dhabi Islamic Bank First Gulf Bank Emirates Airline
7
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2016
6
TRADING INVESTMENTS Cost SR
Market value SR
% of market Value
30 June 2016 (Unaudited) Mutual funds Falcom SAR Murabaha Fund Al-Sunbullah Riyal Fund Al Awal Capital Murabaha SAR Fund
20,037,726 15,051,575 9,800,000 ───────── 44,889,301 ═════════
20,183,366 15,096,908 9,854,689 ───────── 45,134,963 ═════════
44.72 33.45 21.83 ───── 100.00 ═════
1,300,000 84,015 1,712 ───────── 1,385,727 ═════════
1,295,209 84,139 1,746 ───────── 1,381,094 ═════════
93.78 6.09 0.13 ───── 100.00 ═════
98,961,306 57,458,336 10,000,000 ───────── 166,419,642 ═════════
99,278,168 58,339,943 10,223,749 ───────── 167,841,860 ═════════
59.15 34.76 6.09 ───── 100.00 ═════
31 December 2015 (Audited) Mutual funds SAIB Sukuk Fund Al Rajhi Commodities Mudaraba Fund-SAR Falcom SAR Murabaha Fund
30 June 2015 (Unaudited) Mutual funds Al Rajhi Commodities Mudaraba Fund – SAR Falcom SAR Murabaha Fund MEFIC Murabaha Fund
7
TRADING INCOME Six month period ended 30 June 2015 2016 (Unaudited) (Unaudited) SR SR
Movement in unrealized gains Realised gains
250,295 137,155 ───────── 387,450 ═════════
8
112,844 639,373 ───────── 752,217 ═════════
SAIB Trade Finance Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) 30 June 2016
8
TRANSACTIONS WITH RELATED PARTIES
The Fund pays a management fee calculated at an annual rate of 0.50% 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 0.20% of net asset value per annum. At each valuation date, the Fund pays to the Bank service charges annually at 5.5% of the Fund’s car financing placements with the Bank. The Fund calculates a risk allowance at an annual rate of 10% of net income from operations at each valuation date. The risk allowance is in respect of the credit risk on Fund’s assets. The risk allowance reflected in the statement of operations represents the allowance charged during the period. The Bank acts as the Fund’s banker. 9
LAST VALUATION DAY
The last valuation day of the period was 30 June 2016 (2015: 30 June 2015). 10
RESULTS OF OPERATIONS
The results for the interim period may not be indicative of the annual operating results.
9
