saudi hollandi bank - Alawwal Invest
Saudi Financial Equity Fund (Managed by Alawwal Invest Company, previously known as Saudi Hollandi Capital Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE 2017
Saudi Financial Equity Fund INTERIM BALANCE SHEET As at 30 June 2017
Note ASSETS Bank balance Trading investments Dividend receivable
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
7,663,812 29,767,821 209,149 ───────── 37,640,782
7,504,725 30,603,570 ───────── 38,108,295
8,545,486 28,786,710 82,350 ───────── 37,414,546
48,834 ───────── 37,591,948 ═════════
69,527 ───────── 38,038,768 ═════════
33,596 ───────── 37,380,950 ═════════
Units in issue
1,091,712 ═════════
1,209,988 ═════════
1,308,559 ═════════
Per unit value
34.4339 ═════════
31.4373 ═════════
28.5665 ═════════
LIABILITY Accrued expenses NET ASSETS
4
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 2
Saudi Financial Equity Fund INTERIM STATEMENT OF OPERATIONS For the six-month period ended 30 June 2017
Note INVESTMENT INCOME (LOSS) Trading income (loss), net
2017 (Unaudited) SR
2016 (Unaudited) SR
5
3,551,945 ─────────
(2,192,411) ─────────
EXPENSES Management fees Other expenses
6
NET INCOME (LOSS) FROM OPERATIONS
8
(336,170) (34,793) ───────── (370,963) ───────── 3,180,982 ═════════
(379,830) (40,386) ───────── (420,216) ───────── (2,612,627) ═════════
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 3
Saudi Financial Equity Fund INTERIM STATEMENT OF CASH FLOWS For the six-month period ended 30 June 2017
OPERATING ACTIVITIES Net income (loss) from operations Adjustment for: Unrealised losses (gains) on trading investments
Changes in operating assets and liability: Trading investments Accrued expenses Dividend receivable Net cash from operating activities
FINANCING ACTIVITIES Proceeds from sale of units Value of units redeemed Net cash used in financing activities 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 income received
2017 (Unaudited) SR
2016 (Unaudited) SR
3,180,982
(2,612,627)
2,431,932 ───────── 5,612,914
(477,289) ───────── (3,089,916)
(1,596,183) (20,693) (209,149) ───────── 3,786,889 ─────────
10,215,890 33,596 (82,350) ───────── 7,077,220 ─────────
(3,627,802) ───────── (3,627,802) ───────── 159,087
759,400 )2,763,507( ───────── (2,004,107) ───────── 5,073,113
7,504,725 ───────── 7,663,812 ═════════
3,472,373 ───────── 8,545,486 ═════════
643,430 ═════════
594,448 ═════════
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 4
Saudi Financial Equity Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS For the six-month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD
CHANGES FROM OPERATIONS Net income (loss) from operations
CHANGES FROM UNIT TRANSACTIONS Proceeds from sale of units Value of units redeemed Net change from unit transactions NET ASSETS AT THE END OF THE PERIOD
2016 (Unaudited) SR
38,038,768 ─────────
41,997,684 ─────────
3,180,982 ─────────
(2,612,627) ─────────
(3,627,802) ───────── (3,627,802) ───────── 37,591,948 ═════════
759,400 (2,763,507) ───────── (2,004,107) ───────── 37,380,950 ═════════
2017 (Unaudited) Units
2016 (Unaudited) Units
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
UNITS AT THE BEGINNING OF THE PERIOD
1,209,988 ─────────
1,375,690 ─────────
Units sold Units redeemed
(118,276) ───────── (118,276) ───────── 1,091,712 ═════════
28,074 (95,205) ───────── (67,131) ───────── 1,308,559 ═════════
Net decrease in units UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 5
Saudi Financial Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS At 30 June 2017
1
GENERAL
Saudi Financial Equity Fund (the “Fund”) is an open ended fund created by an agreement between Alawwal Invest Company (the “Fund Manager”), a subsidiary of Alawwal Bank (the “Bank”) and investors in the Fund (the “Unit Holders”) and is designed for investors seeking long term capital appreciation through investments in equities of publicly traded Saudi financial institutions and in short term money market placements and funds. The fund is governed by the terms and condition of its prospectus dated 1 March 2017. The assets of the Fund are invested in a portfolio of publicly traded Saudi financial institutions. All income is reinvested in the Fund and is reflected in the unit price. The fund commences its operations on 23 Safar 1416H (corresponding to 22 July 1995). 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 1438 (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. The enhanced requirements of Annexure 5(e) of the Amended Regulations are effective from 2017. 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. Investment valuation Trading investments are valued at market prices. Unrealised gains and losses on the revaluation of investments and realised gains and losses on the sale of investments are recognised in the interim statement of operations. Investment transactions Investment transactions are accounted for as of the trade date. Zakat and income tax Zakat and income tax are considered to be the obligation of the Unit Holders and are not provided in the accompanying interim financial statements. Revenue recognition Dividend income is recorded when declared. Special commission income is recognised on an effective yield basis. Realised gains and losses on investments sold are determined on an average cost basis. Trading income includes all gains and losses from changes in fair value and related dividends from trading investments. Expenses Expenses are recognised based on the accrual method. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyals at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations.
6
Saudi Financial Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 2017
4
TRADING INVESTMENTS
A summary of the trading investment portfolio on the last valuation day of the period is set out below: Cost SR
Description 30 June 2017 (Unaudited) Al Rajhi Bank NCB Samba Financial Group Banque Saudi Fransi Riyad Bank Alinma Bank Saudi British Bank Arab National Bank Bank Al Jazira Saudi Investment Bank Alawwal Bank Al Bilad Bank
31 December 2016 (Audited) Al Rajhi Bank NCB Samba Financial Group Alinma Bank Saudi British Bank Banque Saudi Fransi Riyad Bank Arab National Bank Bank Al Jazira Saudi Investment Bank Alawwal Bank Bank Al Bilad
30 June 2016 (Unaudited) Al Rajhi Bank NCB Samba Financial Group Alinma Bank Banque Saudi Fransi Riyad Bank Saudi British Bank Arab National Bank Bank Al Jazira Saudi Investment Bank Alawwal Bank Al Bilad Bank
7
Market value SR
5,908,727 5,234,177 3,976,227 2,342,430 3,352,742 3,395,854 2,078,385 1,855,062 1,035,829 1,004,308 596,386 96,250 ───────── 30,876,377 ═════════
6,975,000 4,779,900 4,012,950 2,690,040 2,735,000 2,642,405 2,011,500 1,613,520 998,809 700,997 512,550 95,150 ───────── 29,767,821 ═════════
9,247,157 6,775,351 4,155,722 3,395,854 2,078,385 1,998,930 2,245,292 1,855,062 1,035,829 1,004,308 483,182 96,250 ───────── 34,371,322 ═════════
9,873,585 4,965,230 3,944,627 2,614,645 1,875,000 1,873,440 1,651,650 1,590,480 929,445 764,318 418,200 102,950 ───────── 30,603,570 ════════
9,674,041 7,540,422 4,767,044 3,601,367 2,123,863 2,386,604 2,357,827 1,697,403 1,099,086 1,064,266 515,393 96,250 ───────── 36,923,566 ═════════
9,467,280 5,036,220 3,669,150 2,403,040 1,717,425 1,662,880 1,615,440 1,170,675 893,075 677,885 383,040 90,600 ───────── 28,786,710 ═════════
Saudi Financial Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 2017
5
TRADING INCOME (LOSS), NET For the six-month period ended 30 June 2017 2016 (Unaudited) (Unaudited) SR SR
Realised gains (losses) Dividend income Unrealised gains
6
267,434 852,579 2,431,932 ───────── 3,551,945 ═════════
(3,346,498) 676,798 477,289 ───────── (2,192,411) ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund is managed and administered by the Fund Manager. For these services the Fund pays a management fee calculated on every valuation day at an annual rate of 1.95% of the Fund’s daily net assets. In addition, the Fund Manager charges a subscription fee of 1.5% on gross subscriptions and a redemption fee of 0.5% on redemptions within a month of subscribing, which is reinvested in the Fund. Other expenses paid by the Company on behalf of the Fund are charged to the Fund. In the normal course of business the Fund places deposits and borrows from or to the Bank at prevailing market rates. The Bank acts as the Fund’s banker and the Fund Manager acts as the custodian to the Fund’s investment. During the period the Fund has placed special commission bearing money market placements and other accounts with the Bank. 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
Saudi Financial Equity Fund INTERIM BALANCE SHEET As at 30 June 2017
Note ASSETS Bank balance Trading investments Dividend receivable
30 June 2017 (Unaudited) SR
31 December 2016 (Audited) SR
30 June 2016 (Unaudited) SR
7,663,812 29,767,821 209,149 ───────── 37,640,782
7,504,725 30,603,570 ───────── 38,108,295
8,545,486 28,786,710 82,350 ───────── 37,414,546
48,834 ───────── 37,591,948 ═════════
69,527 ───────── 38,038,768 ═════════
33,596 ───────── 37,380,950 ═════════
Units in issue
1,091,712 ═════════
1,209,988 ═════════
1,308,559 ═════════
Per unit value
34.4339 ═════════
31.4373 ═════════
28.5665 ═════════
LIABILITY Accrued expenses NET ASSETS
4
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 2
Saudi Financial Equity Fund INTERIM STATEMENT OF OPERATIONS For the six-month period ended 30 June 2017
Note INVESTMENT INCOME (LOSS) Trading income (loss), net
2017 (Unaudited) SR
2016 (Unaudited) SR
5
3,551,945 ─────────
(2,192,411) ─────────
EXPENSES Management fees Other expenses
6
NET INCOME (LOSS) FROM OPERATIONS
8
(336,170) (34,793) ───────── (370,963) ───────── 3,180,982 ═════════
(379,830) (40,386) ───────── (420,216) ───────── (2,612,627) ═════════
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 3
Saudi Financial Equity Fund INTERIM STATEMENT OF CASH FLOWS For the six-month period ended 30 June 2017
OPERATING ACTIVITIES Net income (loss) from operations Adjustment for: Unrealised losses (gains) on trading investments
Changes in operating assets and liability: Trading investments Accrued expenses Dividend receivable Net cash from operating activities
FINANCING ACTIVITIES Proceeds from sale of units Value of units redeemed Net cash used in financing activities 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 income received
2017 (Unaudited) SR
2016 (Unaudited) SR
3,180,982
(2,612,627)
2,431,932 ───────── 5,612,914
(477,289) ───────── (3,089,916)
(1,596,183) (20,693) (209,149) ───────── 3,786,889 ─────────
10,215,890 33,596 (82,350) ───────── 7,077,220 ─────────
(3,627,802) ───────── (3,627,802) ───────── 159,087
759,400 )2,763,507( ───────── (2,004,107) ───────── 5,073,113
7,504,725 ───────── 7,663,812 ═════════
3,472,373 ───────── 8,545,486 ═════════
643,430 ═════════
594,448 ═════════
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 4
Saudi Financial Equity Fund INTERIM STATEMENT OF CHANGES IN NET ASSETS For the six-month period ended 30 June 2017 2017 (Unaudited) SR NET ASSETS AT THE BEGINNING OF THE PERIOD
CHANGES FROM OPERATIONS Net income (loss) from operations
CHANGES FROM UNIT TRANSACTIONS Proceeds from sale of units Value of units redeemed Net change from unit transactions NET ASSETS AT THE END OF THE PERIOD
2016 (Unaudited) SR
38,038,768 ─────────
41,997,684 ─────────
3,180,982 ─────────
(2,612,627) ─────────
(3,627,802) ───────── (3,627,802) ───────── 37,591,948 ═════════
759,400 (2,763,507) ───────── (2,004,107) ───────── 37,380,950 ═════════
2017 (Unaudited) Units
2016 (Unaudited) Units
UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows:
UNITS AT THE BEGINNING OF THE PERIOD
1,209,988 ─────────
1,375,690 ─────────
Units sold Units redeemed
(118,276) ───────── (118,276) ───────── 1,091,712 ═════════
28,074 (95,205) ───────── (67,131) ───────── 1,308,559 ═════════
Net decrease in units UNITS AT THE END OF THE PERIOD
The accompanying notes 1 to 8 form an integral part of these interim financial statements. 5
Saudi Financial Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS At 30 June 2017
1
GENERAL
Saudi Financial Equity Fund (the “Fund”) is an open ended fund created by an agreement between Alawwal Invest Company (the “Fund Manager”), a subsidiary of Alawwal Bank (the “Bank”) and investors in the Fund (the “Unit Holders”) and is designed for investors seeking long term capital appreciation through investments in equities of publicly traded Saudi financial institutions and in short term money market placements and funds. The fund is governed by the terms and condition of its prospectus dated 1 March 2017. The assets of the Fund are invested in a portfolio of publicly traded Saudi financial institutions. All income is reinvested in the Fund and is reflected in the unit price. The fund commences its operations on 23 Safar 1416H (corresponding to 22 July 1995). 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 1438 (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. The enhanced requirements of Annexure 5(e) of the Amended Regulations are effective from 2017. 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. Investment valuation Trading investments are valued at market prices. Unrealised gains and losses on the revaluation of investments and realised gains and losses on the sale of investments are recognised in the interim statement of operations. Investment transactions Investment transactions are accounted for as of the trade date. Zakat and income tax Zakat and income tax are considered to be the obligation of the Unit Holders and are not provided in the accompanying interim financial statements. Revenue recognition Dividend income is recorded when declared. Special commission income is recognised on an effective yield basis. Realised gains and losses on investments sold are determined on an average cost basis. Trading income includes all gains and losses from changes in fair value and related dividends from trading investments. Expenses Expenses are recognised based on the accrual method. Foreign currencies Transactions in foreign currencies are translated into Saudi Riyals at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at that date. Resulting exchange gains and losses are taken to the interim statement of operations.
6
Saudi Financial Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 2017
4
TRADING INVESTMENTS
A summary of the trading investment portfolio on the last valuation day of the period is set out below: Cost SR
Description 30 June 2017 (Unaudited) Al Rajhi Bank NCB Samba Financial Group Banque Saudi Fransi Riyad Bank Alinma Bank Saudi British Bank Arab National Bank Bank Al Jazira Saudi Investment Bank Alawwal Bank Al Bilad Bank
31 December 2016 (Audited) Al Rajhi Bank NCB Samba Financial Group Alinma Bank Saudi British Bank Banque Saudi Fransi Riyad Bank Arab National Bank Bank Al Jazira Saudi Investment Bank Alawwal Bank Bank Al Bilad
30 June 2016 (Unaudited) Al Rajhi Bank NCB Samba Financial Group Alinma Bank Banque Saudi Fransi Riyad Bank Saudi British Bank Arab National Bank Bank Al Jazira Saudi Investment Bank Alawwal Bank Al Bilad Bank
7
Market value SR
5,908,727 5,234,177 3,976,227 2,342,430 3,352,742 3,395,854 2,078,385 1,855,062 1,035,829 1,004,308 596,386 96,250 ───────── 30,876,377 ═════════
6,975,000 4,779,900 4,012,950 2,690,040 2,735,000 2,642,405 2,011,500 1,613,520 998,809 700,997 512,550 95,150 ───────── 29,767,821 ═════════
9,247,157 6,775,351 4,155,722 3,395,854 2,078,385 1,998,930 2,245,292 1,855,062 1,035,829 1,004,308 483,182 96,250 ───────── 34,371,322 ═════════
9,873,585 4,965,230 3,944,627 2,614,645 1,875,000 1,873,440 1,651,650 1,590,480 929,445 764,318 418,200 102,950 ───────── 30,603,570 ════════
9,674,041 7,540,422 4,767,044 3,601,367 2,123,863 2,386,604 2,357,827 1,697,403 1,099,086 1,064,266 515,393 96,250 ───────── 36,923,566 ═════════
9,467,280 5,036,220 3,669,150 2,403,040 1,717,425 1,662,880 1,615,440 1,170,675 893,075 677,885 383,040 90,600 ───────── 28,786,710 ═════════
Saudi Financial Equity Fund NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 2017
5
TRADING INCOME (LOSS), NET For the six-month period ended 30 June 2017 2016 (Unaudited) (Unaudited) SR SR
Realised gains (losses) Dividend income Unrealised gains
6
267,434 852,579 2,431,932 ───────── 3,551,945 ═════════
(3,346,498) 676,798 477,289 ───────── (2,192,411) ═════════
TRANSACTIONS WITH RELATED PARTIES
The Fund is managed and administered by the Fund Manager. For these services the Fund pays a management fee calculated on every valuation day at an annual rate of 1.95% of the Fund’s daily net assets. In addition, the Fund Manager charges a subscription fee of 1.5% on gross subscriptions and a redemption fee of 0.5% on redemptions within a month of subscribing, which is reinvested in the Fund. Other expenses paid by the Company on behalf of the Fund are charged to the Fund. In the normal course of business the Fund places deposits and borrows from or to the Bank at prevailing market rates. The Bank acts as the Fund’s banker and the Fund Manager acts as the custodian to the Fund’s investment. During the period the Fund has placed special commission bearing money market placements and other accounts with the Bank. 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
