WASATAH SAUDI EQUITY FUND Managed by WASATAH CAPITAL
WASATAH SAUDI EQUITY FUND Managed by WASATAH CAPITAL Interim Financial Statements FOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2017 together with the INDEPENDENT AUDITOR’S REVIEW REPORT
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital UNAUDITED INTERIM FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REVIEW REPORT For the six-months period ended 30 June 2017
INDEX
PAGE
Independent auditor’s review report
2
Interim balance sheet
3
Interim statement of income
4
Interim statement of cash flows
5
Interim statement of changes in net assets attributable to unitholders
6
Notes to the interim financial statements
7 - 11
-1-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM BALANCE SHEET (Unaudited) As at 30 June 2017 (Saudi Riyals) Notes ASSETS Cash and cash equivalents Held for trading investments
7 8
Total assets LIABILITIES Management and custody fees Board of Directors’ fee Accrued expenses Total liabilities Net assets value attributable to Unitholders Units in issue (numbers) Net assets value - per unit
9 9
30 June 2017
30 June 2016
890,065 13,047,629
4,810,797 8,522,242
13,937,694
13,333,039
54,177 11,901 25,172
27,967 9,863 22,795
91,250
60,625
13,846,444
13,272,414
12,291
12,719
1,127
1,044
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -3-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM STATEMENT OF INCOME (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
Notes INCOME Unrealized gain on investments, net Realized (loss)/ gain on investments, net Dividend income Other income
EXPENSES Management fee Custody fee Board of Directors’ fee, net Other operating expenses Total expenses NET INCOME FOR THE PERIOD
9 9 9 10
30 June 2017
For the period from 1 February 2016 to 30 June 2016
1,064,325 (703,017) 255,576 918
138,162 42,952 51,899 -
617,802
233,013
81,858 26,195 11,901 31,675
31,414 10,052 9,863 26,250
(151,629)
(77,579)
466,173
155,434
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -4-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM STATEMENT OF CASH FLOWS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
30 June 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period
For the period from 1 February 2016 to 30 June 2016
466,173
155,434
703,017
(42,952)
(1,064,325)
(138,162)
Changes in operating assets and liabilities: Purchase of held for trading investments Proceeds from disposal of held for trading investments Other receivable Management and custody fees Board of Directors’ fee Accrued expenses
(12,725,226) 11,624,615 24,750 1,279 (10,061) (15,791)
(9,050,954) 709,826 27,967 9,863 22,795
Net cash generated by/(used in) operating activities
(995,569)
(8,306,183)
Proceeds from subscription of units Payments for redemption of units
(260,708)
13,116,980 -
Net cash (used in)/generated by financing activities
(260,708)
13,116,980
(1,256,277) 2,146,342
4,810,797 -
890,065
4,810,797
Adjustment to reconcile net loss for the period to net cash generated from operating activities Realised loss / (gain) on held for trading investments Unrealised gain on held for trading investments
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -5-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
30 June 17
For the period from 1 February 2016 to 30 June 2016
Net assets value at beginning of the period Add: Subscriptions during the period Less: Redemptions during the period Net income
13,640,979 (260,708) 466,173
13,116,980 155,434
Net assets value at end of the period
13,846,444
13,272,414
UNIT TRANSACTIONS
Numbers
Units at beginning of the period Add: Units subscribed during the period Less: Units redeemed during the period Net decrease in units
12,530 (239) (239)
12,719 12,719
Units at end of the period
12,291
12,719
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -6-
WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
1.
THE FUND AND ITS ACTIVITIES Wasatah Saudi Equity Fund (the "Fund") is an investment fund established and managed through an agreement between Al Wasatah Al Maliah Company “Wasatah Capital” (the "Fund Manager") and the Fund Investors (the "Unitholders"). Wasatah Saudi Equity Fund is a Shariah Complaint open-ended Fund that aims to achieve mid to long-term capital appreciation and provide its investors with absolute returns. The Fund invests in Shariah compliant stocks listed on the Saudi Stock Exchange, including Initial Public Offerings ("IPOs"), rights issues and rump offerings, other similar strategy equity funds and IPO funds. The Fund reinvests all realized capital gains and/or any investment income and the Fund does not make any dividend distributions to its unit holders. The Capital Market Authority (“CMA”) granted approval for the establishment of the Fund in its letter number (2015-100-3) dated 27 Safar 1437H (corresponding to 09 December 2015G). The Fund commenced its operations on 22 Rabi Al-Thani 1436H (corresponding to 01 February 2016 G). In dealing with the Unitholders, the Fund Manager considers the Fund as an independent unit. Accordingly, the Fund Manager prepares separate financial statements for the Fund. Furthermore, the unitholders are considered to be owners of the assets of the Fund. The interim results of the Fund may not be an indicator of its annual results of the operations. The Fund started its operations on 1 February 2016 and the first financial period of the fund per the terms and conditions of the Fund was from 1 February 2016 to 31 December 2016. Therefore, the comparative figures as at 30 June 2016 presented in these interim financial statements are un-reviewed and are based on management accounts.
2.
REGULATORY AUTHORITY The Fund is governed by the Investment Fund Regulations (“the Regulations”) published by Capital Market Authority (“CMA”) on 3 Dhul Hajj 1427 H (corresponding to 24 December 2006) thereafter amended (“the amended regulation”) on 16 Sha’ban 1437 H (corresponding to 23 May 2016), detailing requirement for all funds within the Kingdom of Saudi Arabia. The amended regulations came into effect from 6 Safar 1438 H (corresponding to 6 November 2016).
3.
SUBSCRIPTION / REDEMPTION (DEALING DAY AND VALUATION DAY) The Fund is open for subscriptions / redemptions of units on each Monday and Wednesday (each a “Dealing Day”). The value of the Fund’s portfolio is determined on each business day (each a “Valuation Day”). The net asset value of the Fund for the purpose of purchase or sale of units is determined by dividing the net value of assets (fair value of fund assets minus fund liabilities) by the total number of outstanding fund units on the relevant valuation day.
4.
BASIS OF PREPARATION
a)
Statement of compliance These interim financial statements have been presented in accordance with the requirements of accounting standards on financial reporting issued by the Saudi Organization of Certified Public Accountants (the “SOCPA”).
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WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
BASIS OF PREPARATION (continued) b)
Basis of measurement These interim financial statements have been prepared under the historical cost convention, except for held for trading investments that are measured at fair value, using accrual basis of accounting and the going concern concept.
c)
Functional and presentation currency These interim financial statements have been presented in Saudi Riyals (SR), which is the functional currency of the Fund. All financial information presented in SR has been rounded to the nearest Saudi Riyal.
d)
Use of estimates and judgement The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and future years affected.
5.
SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES The significant accounting and risk management 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 December 31, 2016.
6.
MANAGEMENT FEE AND CUSTODIAN CHARGES The Fund Manager charges each investor a subscription fee of a percentage not exceeding 1% of the subscribed amount to cover administration costs and is netted off against proceeds from issuance of units. Under the terms and conditions of the Fund, the Fund is liable to pay the following expenses to the Fund Manager:
7.
-
Management fee at the rate of 1.25% per annum of the net assets value of the Fund at each valuation day, payable quarterly.
-
Custody fee at the rate of 0.40% of the net asset value of the fund at each valuation day, payable quarterly.
CASH AND CASH EQUIVALENTS 30 June 2017 Cash at bank – current accounts
890,065
30 June 2016 4,810,797
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WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
8.
HELD FOR TRADING INVESTMENTS The sector-wise composition of investments held for trading is summarized as follows: Sector Materials Banks Real estate management and development Food and beverages Retailing Telecommunication services Insurance Food and staples retailing Health care equipment and service
Sector Materials Real estate management and development Mutual funds Health care equipment and services Banks Food and beverages Transportation Consumer services Energy Telecommunication services Insurance Food and staples retailing
9.
Carrying value
% of market value
3,246,684 2,325,179 2,026,518 1,410,060 1,262,453 1,017,001 318,209 303,287 73,913
Market value 30 June 2017 3,481,202 2,511,835 2,039,003 1,766,130 1,402,362 1,117,081 329,680 321,251 79,085
11,983,304
13,047,629
100%
1,958,483 1,074,765 1,158,234 784,332 733,506 682,876 462,155 481,534 455,596 413,451 337,789 117,683
Market value 30 June 2016 1,989,820 1,141,500 903,913 765,888 738,156 702,380 483,200 450,500 419,432 418,535 378,918 130,000
8,660,404
8,522,242
Carrying value
27% 19% 16% 13% 11% 9% 2% 2% 1%
% of market value 23% 13% 11% 9% 9% 8% 6% 5% 5% 5% 4% 2% 100%
TRANSACTIONS AND BALANCES WITH RELATED PARTIES In the ordinary course of its activities, the Fund transacts with its related parties. The Fund Manager, its employees and the Fund's Board of Directors are considered to be related parties of the Fund.
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WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued) The Fund Manager is responsible for the overall management of the Fund's activities. The Fund Manager can also enter into arrangements with other institutions for the provision of investment, custody or other administrative services on behalf of the Fund. The Fund Manager charges the Fund with a management fee and custody fee of 1.25% and 0.40% per annum of the Fund's assets, calculated on a daily basis. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit fee, board compensation and other similar charges. The annual board compensation is subject to a maximum of SR 48,000 for all the Board members. The unit holders’ account at 30 June included units held as follows: 30 June 2016 30 June 2017 Net Asset Net Asset Units Value Units Value (in numbers) SAR (in numbers) SAR Held by the Fund Manager
5,000
5,632,750
5,000
5,217,555
Related party transactions for the period ended 30 June 2016 and balances arising there from are described as under:
Related party
Nature of transactions
Transactions during the six months period ended 30 June 2016
2017
Closing balance 30 June 2016
2017
Wasatah Capital
Management fee
81,858
31,414
41,043
21,187
Custody fee
26,195
10,052
13,134
6,780
Board of Directors
Annual remuneration
11,901
9,863
11,901
9,863
Wasatah IPO Fund
Subscription
-
1,400,000
Redemption
896,404
518,090
-
903,913
10. OTHER OPERATING EXPENSES Benchmark calculation fee CMA supervision fee Other expenses
30 June 2017 10,600 3,719 17,356
30 June 2016 8,784 3,082 14,384
31,675
26,250
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WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
11. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments consist of financial assets and financial liabilities. The Fund’s financial assets consist of cash & bank balances and held for trading investments and financial liabilities consist of management and custody fees, Board of Directors’ fee and certain accrued expenses. For investments traded in an active market, fair value is determined by reference to quoted market prices. The fair values of other financial instruments are not materially different from their carrying values. 12. LAST VALUATION DAY The last valuation day of the period was 30 June 2017. 13. APPROVAL OF INTERIM FINANCIAL STATEMENTS These interim financial statements were approved by the Fund Board on 10 Dhul Qa’ada, 1438 (H) corresponding to 2 August 2017.
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WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital UNAUDITED INTERIM FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REVIEW REPORT For the six-months period ended 30 June 2017
INDEX
PAGE
Independent auditor’s review report
2
Interim balance sheet
3
Interim statement of income
4
Interim statement of cash flows
5
Interim statement of changes in net assets attributable to unitholders
6
Notes to the interim financial statements
7 - 11
-1-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM BALANCE SHEET (Unaudited) As at 30 June 2017 (Saudi Riyals) Notes ASSETS Cash and cash equivalents Held for trading investments
7 8
Total assets LIABILITIES Management and custody fees Board of Directors’ fee Accrued expenses Total liabilities Net assets value attributable to Unitholders Units in issue (numbers) Net assets value - per unit
9 9
30 June 2017
30 June 2016
890,065 13,047,629
4,810,797 8,522,242
13,937,694
13,333,039
54,177 11,901 25,172
27,967 9,863 22,795
91,250
60,625
13,846,444
13,272,414
12,291
12,719
1,127
1,044
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -3-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM STATEMENT OF INCOME (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
Notes INCOME Unrealized gain on investments, net Realized (loss)/ gain on investments, net Dividend income Other income
EXPENSES Management fee Custody fee Board of Directors’ fee, net Other operating expenses Total expenses NET INCOME FOR THE PERIOD
9 9 9 10
30 June 2017
For the period from 1 February 2016 to 30 June 2016
1,064,325 (703,017) 255,576 918
138,162 42,952 51,899 -
617,802
233,013
81,858 26,195 11,901 31,675
31,414 10,052 9,863 26,250
(151,629)
(77,579)
466,173
155,434
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -4-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM STATEMENT OF CASH FLOWS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
30 June 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period
For the period from 1 February 2016 to 30 June 2016
466,173
155,434
703,017
(42,952)
(1,064,325)
(138,162)
Changes in operating assets and liabilities: Purchase of held for trading investments Proceeds from disposal of held for trading investments Other receivable Management and custody fees Board of Directors’ fee Accrued expenses
(12,725,226) 11,624,615 24,750 1,279 (10,061) (15,791)
(9,050,954) 709,826 27,967 9,863 22,795
Net cash generated by/(used in) operating activities
(995,569)
(8,306,183)
Proceeds from subscription of units Payments for redemption of units
(260,708)
13,116,980 -
Net cash (used in)/generated by financing activities
(260,708)
13,116,980
(1,256,277) 2,146,342
4,810,797 -
890,065
4,810,797
Adjustment to reconcile net loss for the period to net cash generated from operating activities Realised loss / (gain) on held for trading investments Unrealised gain on held for trading investments
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -5-
WASATAH SAUDI EQUITY FUND Managed by Wasatah Capital INTERIM STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
30 June 17
For the period from 1 February 2016 to 30 June 2016
Net assets value at beginning of the period Add: Subscriptions during the period Less: Redemptions during the period Net income
13,640,979 (260,708) 466,173
13,116,980 155,434
Net assets value at end of the period
13,846,444
13,272,414
UNIT TRANSACTIONS
Numbers
Units at beginning of the period Add: Units subscribed during the period Less: Units redeemed during the period Net decrease in units
12,530 (239) (239)
12,719 12,719
Units at end of the period
12,291
12,719
The accompanying notes 1 to 13 form an integral part of these interim financial statements. -6-
WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
1.
THE FUND AND ITS ACTIVITIES Wasatah Saudi Equity Fund (the "Fund") is an investment fund established and managed through an agreement between Al Wasatah Al Maliah Company “Wasatah Capital” (the "Fund Manager") and the Fund Investors (the "Unitholders"). Wasatah Saudi Equity Fund is a Shariah Complaint open-ended Fund that aims to achieve mid to long-term capital appreciation and provide its investors with absolute returns. The Fund invests in Shariah compliant stocks listed on the Saudi Stock Exchange, including Initial Public Offerings ("IPOs"), rights issues and rump offerings, other similar strategy equity funds and IPO funds. The Fund reinvests all realized capital gains and/or any investment income and the Fund does not make any dividend distributions to its unit holders. The Capital Market Authority (“CMA”) granted approval for the establishment of the Fund in its letter number (2015-100-3) dated 27 Safar 1437H (corresponding to 09 December 2015G). The Fund commenced its operations on 22 Rabi Al-Thani 1436H (corresponding to 01 February 2016 G). In dealing with the Unitholders, the Fund Manager considers the Fund as an independent unit. Accordingly, the Fund Manager prepares separate financial statements for the Fund. Furthermore, the unitholders are considered to be owners of the assets of the Fund. The interim results of the Fund may not be an indicator of its annual results of the operations. The Fund started its operations on 1 February 2016 and the first financial period of the fund per the terms and conditions of the Fund was from 1 February 2016 to 31 December 2016. Therefore, the comparative figures as at 30 June 2016 presented in these interim financial statements are un-reviewed and are based on management accounts.
2.
REGULATORY AUTHORITY The Fund is governed by the Investment Fund Regulations (“the Regulations”) published by Capital Market Authority (“CMA”) on 3 Dhul Hajj 1427 H (corresponding to 24 December 2006) thereafter amended (“the amended regulation”) on 16 Sha’ban 1437 H (corresponding to 23 May 2016), detailing requirement for all funds within the Kingdom of Saudi Arabia. The amended regulations came into effect from 6 Safar 1438 H (corresponding to 6 November 2016).
3.
SUBSCRIPTION / REDEMPTION (DEALING DAY AND VALUATION DAY) The Fund is open for subscriptions / redemptions of units on each Monday and Wednesday (each a “Dealing Day”). The value of the Fund’s portfolio is determined on each business day (each a “Valuation Day”). The net asset value of the Fund for the purpose of purchase or sale of units is determined by dividing the net value of assets (fair value of fund assets minus fund liabilities) by the total number of outstanding fund units on the relevant valuation day.
4.
BASIS OF PREPARATION
a)
Statement of compliance These interim financial statements have been presented in accordance with the requirements of accounting standards on financial reporting issued by the Saudi Organization of Certified Public Accountants (the “SOCPA”).
-7-
WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
BASIS OF PREPARATION (continued) b)
Basis of measurement These interim financial statements have been prepared under the historical cost convention, except for held for trading investments that are measured at fair value, using accrual basis of accounting and the going concern concept.
c)
Functional and presentation currency These interim financial statements have been presented in Saudi Riyals (SR), which is the functional currency of the Fund. All financial information presented in SR has been rounded to the nearest Saudi Riyal.
d)
Use of estimates and judgement The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and future years affected.
5.
SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES The significant accounting and risk management 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 December 31, 2016.
6.
MANAGEMENT FEE AND CUSTODIAN CHARGES The Fund Manager charges each investor a subscription fee of a percentage not exceeding 1% of the subscribed amount to cover administration costs and is netted off against proceeds from issuance of units. Under the terms and conditions of the Fund, the Fund is liable to pay the following expenses to the Fund Manager:
7.
-
Management fee at the rate of 1.25% per annum of the net assets value of the Fund at each valuation day, payable quarterly.
-
Custody fee at the rate of 0.40% of the net asset value of the fund at each valuation day, payable quarterly.
CASH AND CASH EQUIVALENTS 30 June 2017 Cash at bank – current accounts
890,065
30 June 2016 4,810,797
-8-
WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
8.
HELD FOR TRADING INVESTMENTS The sector-wise composition of investments held for trading is summarized as follows: Sector Materials Banks Real estate management and development Food and beverages Retailing Telecommunication services Insurance Food and staples retailing Health care equipment and service
Sector Materials Real estate management and development Mutual funds Health care equipment and services Banks Food and beverages Transportation Consumer services Energy Telecommunication services Insurance Food and staples retailing
9.
Carrying value
% of market value
3,246,684 2,325,179 2,026,518 1,410,060 1,262,453 1,017,001 318,209 303,287 73,913
Market value 30 June 2017 3,481,202 2,511,835 2,039,003 1,766,130 1,402,362 1,117,081 329,680 321,251 79,085
11,983,304
13,047,629
100%
1,958,483 1,074,765 1,158,234 784,332 733,506 682,876 462,155 481,534 455,596 413,451 337,789 117,683
Market value 30 June 2016 1,989,820 1,141,500 903,913 765,888 738,156 702,380 483,200 450,500 419,432 418,535 378,918 130,000
8,660,404
8,522,242
Carrying value
27% 19% 16% 13% 11% 9% 2% 2% 1%
% of market value 23% 13% 11% 9% 9% 8% 6% 5% 5% 5% 4% 2% 100%
TRANSACTIONS AND BALANCES WITH RELATED PARTIES In the ordinary course of its activities, the Fund transacts with its related parties. The Fund Manager, its employees and the Fund's Board of Directors are considered to be related parties of the Fund.
-9-
WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued) The Fund Manager is responsible for the overall management of the Fund's activities. The Fund Manager can also enter into arrangements with other institutions for the provision of investment, custody or other administrative services on behalf of the Fund. The Fund Manager charges the Fund with a management fee and custody fee of 1.25% and 0.40% per annum of the Fund's assets, calculated on a daily basis. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit fee, board compensation and other similar charges. The annual board compensation is subject to a maximum of SR 48,000 for all the Board members. The unit holders’ account at 30 June included units held as follows: 30 June 2016 30 June 2017 Net Asset Net Asset Units Value Units Value (in numbers) SAR (in numbers) SAR Held by the Fund Manager
5,000
5,632,750
5,000
5,217,555
Related party transactions for the period ended 30 June 2016 and balances arising there from are described as under:
Related party
Nature of transactions
Transactions during the six months period ended 30 June 2016
2017
Closing balance 30 June 2016
2017
Wasatah Capital
Management fee
81,858
31,414
41,043
21,187
Custody fee
26,195
10,052
13,134
6,780
Board of Directors
Annual remuneration
11,901
9,863
11,901
9,863
Wasatah IPO Fund
Subscription
-
1,400,000
Redemption
896,404
518,090
-
903,913
10. OTHER OPERATING EXPENSES Benchmark calculation fee CMA supervision fee Other expenses
30 June 2017 10,600 3,719 17,356
30 June 2016 8,784 3,082 14,384
31,675
26,250
- 10 -
WASATAH SAUDI EQUITY FUND MANAGED BY WASATAH CAPITAL NOTES TO THE INTERIM FINANCIAL STATEMENTS (Unaudited) For the six months period ended 30 June 2017 (Saudi Riyals)
11. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments consist of financial assets and financial liabilities. The Fund’s financial assets consist of cash & bank balances and held for trading investments and financial liabilities consist of management and custody fees, Board of Directors’ fee and certain accrued expenses. For investments traded in an active market, fair value is determined by reference to quoted market prices. The fair values of other financial instruments are not materially different from their carrying values. 12. LAST VALUATION DAY The last valuation day of the period was 30 June 2017. 13. APPROVAL OF INTERIM FINANCIAL STATEMENTS These interim financial statements were approved by the Fund Board on 10 Dhul Qa’ada, 1438 (H) corresponding to 2 August 2017.
- 11 -
