ADCB SICAV. Société d'investissement à Capital Variable ANNUAL REPORT INCLUDING AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016

Transcription

1 ANNUAL REPORT INCLUDING AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 Grand Duchy of Luxembourg R.C.S. Luxembourg B186336

2 1, rue de Potager L 2347 Luxembourg Contents Page (s) Management and Administration of the Company 1 Directors Report 2 6 Report of the Réviseur d Entreprises agréé 7 8 FINANCIAL STATEMENTS Statement of Financial Position 9 12 Statement of Comprehensive Income Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares Statement of Cash Flows Notes to the financial statements APPENDIX Portfolio Statements Other information (unaudited) No subscription can be received on the basis of this annual report including audited financial statements. Subscriptions are only valid if made on the basis of the current prospectus supplemented by the latest annual report including audited financial statements.

3 Management and Administration of the Company Registered Office Board of Directors Simon Copleston Mark Friedenthal Deepak Khullar Arup Mukhopadhyay Management Company Investment Manager Depositary Bank, Paying Agent and Administration Agent Auditor Luxembourg Legal Counsel NOVACAP Asset Management S.A. Abu Dhabi Commercial Bank Sheikh Zayed Street, Abu Dhabi, United Arab Emirates Deutsche Bank Luxembourg S.A. 2, rue Konrad Adenauer L-1115 Luxembourg Deloitte Audit Société à responsabilité limitée Cabinet de Révision agréé 560, rue de Neudorf L-2220 Luxembourg Arendt & Medernach 41A, avenue John F. Kennedy L-2082 Luxembourg 1

4 Directors Report The Board of Directors of (the Company ), is pleased to present the audited financial statements for the year ended 31 December The Company has an umbrella structure as of 31 December 2016 with 4 active Sub-Funds and is authorised under Part I of Law of 17 December 2010 on undertakings for collective investment, as amended in accordance with the provisions of the UCITS Directive and listed on the official list of UCITS approved by the CSSF. As of 31 December 2016, the following Sub-Funds are active: - ADCB MSCI UAE Index Fund - ADCB UAE Equity Fund - ADCB Arabian Index Fund - ADCB Islamic GCC Equity Fund Principal Activity ADCB MSCI UAE Index Fund The Sub-Fund's investment objective is to provide investors with investment returns which correspond closely to the total return of the MSCI UAE Index before fees and expenses. The price of the MSCI UAE Index will be calculated on an ongoing basis and published in the financial press (Bloomberg code at the date of the prospectus MCGLAEN Index). The Investment Manager will seek to achieve the Sub-Fund's investment objective by investing the Sub-Fund's assets directly in UAE listed securities in each case as determined by the Index Provider and which are for the time being constituent securities of the MSCI UAE Index ("Index Securities"). The MSCI UAE Index is intended to reflect the performance of a number of underlying securities which are weighted to account for economic significance and is a sufficiently diversified index for the purposes of Article 53 of Directive 2009/65/EC. In any case the exposure of the Sub-Fund to any single security will not exceed 20% of the index, except that one single component may represent up to 35% of the index where justified by exceptional market conditions, as it may be the case for Emirates Telecom. The Sub-Fund may also invest in certain securities other than Index Securities ("Non-Index Securities") in order to minimise the Fund's tracking error relative to the performance of the MSCI UAE Index. Non-Index Securities comprise equity securities listed on the Abu Dhabi Securities Exchange, the Dubai Financial Market or the Nasdaq Dubai. The Sub-Fund s portfolio of securities will be rebalanced from time to time to reflect any changes to the composition of, or the weighting of securities in, the MSCI UAE Index with a view to minimising tracking error of the Sub-Fund's overall returns relative to the performance of the MSCI UAE Index. Such rebalancing may be in the form of investments in Non-Index Securities. The Sub-Fund will normally invest at least 80% of its assets in constituent securities of the MSCI UAE Index. The Sub-Fund may also: (a) hold Non-Index Securities not exceeding 20% of the Net Asset Value of the Sub-Fund; (b) hold cash and deposits not exceeding 10% of the Net Asset Value of the Sub-Fund (except upon receipt of cash subscriptions or in order to fund cash payments on redemption); and (c) not invest in equities or use derivatives solely for speculative purposes or for leveraging the Sub-Fund except as otherwise permitted under the terms of the Prospectus. (d) not invest more than 10% of the Net Asset Value of the Sub-Fund in other UCI. 2

5 Directors Report (continued) Principal Activity (continued) ADCB UAE Equity Fund The investment objective of ADCB UAE Equity Fund is to achieve medium to long-term capital growth and a reasonable level of income by investing primarily in equities of the United Arab Emirates listed on the Abu Dhabi Securities Market, Dubai Financial Market and the Nasdaq Dubai. In addition and where appropriate the Sub-Fund may invest in other securities including: (a) equities issued by companies which are listed on recognised stock exchanges in Gulf Cooperation Council ( GCC ) or other countries; (b) other transferable securities including, without limitation, notes, bonds or other similar products issued by either corporate or sovereign entities; (c) units in collective investment schemes including units in schemes managed or operated by the Fund Manager (provided there is no doubling of charges as a result); and (d) cash or cash equivalent. The Sub-Fund shall in addition, comply with the following general guidelines, whereby investments in equities which are not listed on a stock exchange in the UAE shall not exceed 30% of the Net Asset Value of the Sub- Fund. Also, investments in sovereign and other public securities issued by any one sovereign entity shall not exceed 10% of the Net Asset Value of the Sub-Fund. ADCB Arabian Index Fund The Sub-Fund's investment objective is to provide investors with investment returns which correspond closely to the total return of the S&P Pan Arab Composite LargeMidCap Index before fees and expenses. The price of the S&P Pan Arab Composite LargeMidCap Index will be calculated on an ongoing basis and published in the financial press (Bloomberg code at the date of the prospectus SPACNUX Index). The Investment Manager will seek to achieve the Sub-Fund's investment objective by investing the Sub-Fund's assets directly in listed securities in the Arabian markets, in each case as determined by the Index Provider and which are for the time being constituent securities of the S&P Pan Arab Composite LargeMidCap Index ("Index Securities"). The Investment Manager may also invest in certain securities other than Index Securities ("Non-Index Securities") in order to minimise the Sub-Fund's tracking error relative to the performance of the S&P Pan Arab Composite LargeMidCap Index provided that the value of such securities does not exceed 20% of the Net Asset Value of the Sub-Fund. Eligible Non-Index Securities will comprise equity securities listed on securities exchanges of the Arabian markets. The Sub-Fund will normally invest at least 80% of its assets in constituent securities of the S&P Pan Arab Composite LargeMidCap Index. 3

6 Directors Report (continued) Principal Activity (continued) ADCB Arabian Index Fund (continued) The Sub-Fund may also: (a) hold Non-Index Securities not exceeding twenty per cent (20%) of the Net Asset Value of the Sub-Fund; (b) hold cash and deposits not exceeding ten per cent (10%) of the Net Asset Value of the Sub-Fund (except upon receipt of cash subscriptions or in order to fund cash payments on redemption); and (c) not invest in equities or use derivatives solely for speculative purposes or for leveraging the Sub-Fund except as otherwise permitted under the terms of the Prospectus. ADCB Islamic GCC Equity Fund The Sub-Fund's investment objective is to achieve medium to long-term capital growth and a reasonable level of income by investing primarily in equities listed on recognized Gulf Cooperation Council ( GCC ) stock exchanges. In addition in line with the investment restrictions, where appropriate the Sub-Fund may invest in other securities including: (a) Shariah compliant equities issued by companies which are listed on exchanges outside the GCC, but that are headquartered in the GCC or drive a large portion of their revenues from the GCC. (b) other Shariah compliant transferable securities including, without limitation, notes, Sukuk or other similar products issued by either corporate or sovereign entities; (c) units in Shariah compliant collective investment schemes including units in schemes managed or operated by the Fund Manager (provided there is no doubling of charges as a result); and (d) Cash or Shariah compliant cash equivalent investments including non-interest bearing cash. The Sub-Fund shall in addition, comply with the following general guidelines, whereby investments in equities which are not listed on a stock exchange in the GCC shall not exceed 30% of the Net Asset Value of the Sub- Fund. Also, investments in sovereign and other public securities issued by any one sovereign entity shall not exceed 10% of the Net Asset Value of the Sub-Fund. Risk Management Objectives and Policies The Company may, acting for and on behalf of a given Sub-Fund, use derivative instruments, on a case by case basis, in order to manage the currency exchange, credit and interest rate risk exposures of the relevant Sub-Fund. This does not apply to the Sub-Fund - ADCB Islamic GCC Equity Fund where the Sub-Fund is prohibited from holding or trading in derivative instruments. While the Company may enter into certain hedging arrangements in order to manage and mitigate currency exchange, credit and interest rate risks, there is no certainty that such arrangements will be entered into or established, or, even if entered into or established, that they will be sufficient to cover those risks. Results and dividends The results of operations for the year are set out in the Statement of Comprehensive Income. 4

7 Directors Report (continued) Business review Net assets attributable to holders of redeemable shares USD Comprehensive income/(loss) for the year attributable to holders of redeemable shares USD - ADCB MSCI UAE Index Fund - ADCB UAE Equity Fund - ADCB Arabian Index Fund ADCB Islamic GCC Equity Fund 32,495, ,940,835 12,346,574 5,847,966 3,804,785 10,935, , ,030 Performance of the classes for the year Class R * Class I * Class X * - ADCB MSCI UAE Index Fund 12% 13% - - ADCB UAE Equity Fund 11% 12% - - ADCB Arabian Index Fund 7% 7% - ADCB Islamic GCC Equity Fund 5% 5% 5% *The Class R, Class I and Class X shares of ADCB Islamic GCC Equity Fund were issued during the year under review, therefore the performance for these share classes discloses the performance relative to the issuance price per share class. Statement of Directors responsibilities in respect of the Financial Statements of the Company from which these financial statements have been derived. The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as the Board of Directors of the Company determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Subsequent Events Two new Sub-Funds, ADCB Target 2025 Fund and ADCB Target 2035 Fund, were approved by the CSSF and will be launched in the first quarter of

8 Directors Report (continued) Auditor Deloitte Audit, Société à responsabilité limitée was appointed as auditor of the Company and has agreed to accept this mandate. For and on behalf of the Board of Directors Mark Friedenthal Director Arup Mukhopadhyay Director Date: 19 April 2017 The information in this report represents historical data and is not an indication of future performance. 6

9 Deloitte. To the Shareholders of Deloitte Audit Societe a responsabiilte limitee 560, rue de Neudorf L-2220 Luxembourg BP L-1011 Luxembourg Tel: Fax: REPORT OF THE REVISEUR D'ENTREPR/SES AGREE Following our appointment by the General Meeting of the Shareholders dated 29 April 2016, we have audited the accompanying financial statements of (the "Company"), which comprise the statement of financial position as at 31 December 2016, and the statement of comprehensive income, the statement of changes in net assets attributable to holders of redeemable shares and the statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes to the financial statements. Responsibility of the Board of Directors of the Company for the financial statements The Board of Directors of the Company is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements and for such control as the Board of Directors of the Company determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the Reviseur d'entreprises agree Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the Reviseur d'entreprises agree's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Reviseur d'entreprises agree considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Societe a responsabilite limitee au capital de RCS Luxembourg B Autonsation d'etabhssement:

10 Deloitte. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Board of Directors of the Company, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of as at 31 December 2016, and of the results of its operations, changes in its net assets attributable to holders of redeemable shares and its cash flows for the year then ended in accordance with the International Financial Reporting Standards as adopted by the European Union and in accordance wilh Luxemt.Jourg legal and regulatory requirements relating to the preparation of financial statements. Other information The Board of Directors of the Company is responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our report of Reviseur d'entreprises agree thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. For Deloitte Audit, Cabinet de revision agree Rainer Mahnkopf, Reviseur d'entreprises agree Director Luxembourg, 24 April

11 L Luxembourg Statement of Financial Position as at 31 December 2016 Note ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund ADCB Islamic GCC Equity Fund** USD USD USD USD USD Current assets Cash and cash equivalents 3 360,310 2,035, , ,019 2,856,062 Other receivables 4-173, ,478 Financial assets at fair value through profit or loss 6, 13, 14 32,217,013 99,870,027 12,118,132 5,744, ,905,907 * Total assets 32,577, ,079,040 12,422,330 5,900, ,935,447 Current liabilities Administration fee payable 9 (14,908) (45,650) (18,000) (12,000) (90,558) Sub-Custodian fee payable 9 (2,589) (6,553) (2,800) (1,490) (13,432) Depositary fee payable 9 (12,033) (20,718) (15,738) (16,442) (64,931) Investment Management fee payable 9 (27,060) - (10,082) (4,446) (41,588) Management Company fees payable 9 (694) (2,149) (261) (122) (3,226) Other payables and accrued expenses 5 (24,182) (63,135) (28,875) (18,100) (134,292) Total liabilities (81,466) (138,205) (75,756) (52,600) (348,027) Net assets attributable to holders of redeemable shares 32,495, ,940,835 12,346,574 5,847, ,587,420 * * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). ** The sub-fund ADCB Islamic GCC Equity Fund was launched on 2 May The notes are an integral part of these financial statements. 9

12 L Luxembourg Statement of Financial Position as at 31 December 2016 Note ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund ADCB Islamic GCC Equity Fund USD USD USD USD Number of shares in circulation- Class R 4,150,912 11,150,194 1,300,847 65,609 Number of shares in circulation- Class I 100, , , ,000 Number of shares in circulation- Class X ,411 Net Asset value per share- Class R Net Asset value per share- Class I Net Asset value per share- Class X The financial statements were approved by the Board of Directors on 19 April 2017 and signed on its behalf by: Mark Friedenthal Arup Mukhopadhyay The notes are an integral part of these financial statements. 10

13 L Luxembourg Statement of Financial Position as at 31 December 2015 Note ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund USD USD USD USD Current assets Cash and cash equivalents 3 407,742 2,152, ,089 3,461,204 Subscription receivable - - 2,133 2,133 Other receivables ,082 2,082 Financial assets at fair value through profit or loss 6, 13, 14 31,920, ,548,028 32,034, ,426,645 * Total assets 32,327, ,700,401 32,939, ,892,064 Current liabilities Administration fee payable 9 (16,705) (57,481) (23,257) (97,443) Sub-Custodian fee payable 9 (5,049) (8,431) (3,393) (16,873) Depositary fee payable 9 (11,223) (24,637) (15,144) (51,004) Investment Management fee payable 9 (25,796) (132,459) (33,492) (191,747) Payable for unsettled trades - (97,943) - (97,943) Redemption payable (100,000) (31,130) - (131,130) Management Company fees payable 9 (1,357) (4,652) (1,627) (7,636) Other payables and accrued expenses 5 (43,071) (56,384) (43,732) (143,187) Total liabilities (203,201) (413,117) (120,645) (736,963) Net assets attributable to holders of redeemable shares 32,124, ,287,284 32,818, ,155,101 * * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). The notes are an integral part of these financial statements. 11

14 L Luxembourg Statement of Financial Position as at 31 December 2015 Note ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund USD USD USD Number of shares in circulation- Class R 4,616,179 13,030,424 3,870,752 Number of shares in circulation- Class I 100, , ,000 Net Asset value per share- Class R Net Asset value per share- Class I The notes are an integral part of these financial statements. 12

15 L Luxembourg Statement of Comprehensive Income Note ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund ADCB Islamic GCC Equity Fund ** USD USD USD USD USD Income Dividend income 1,451,749 4,504,811 1,235,598 59,022 7,251,180 Interest income Other income 18, ,840 17, ,965 Net realised gains/(losses) on financial assets at fair value through profit or loss 7 (2,996,823) (6,975,922) (6,734,046) (126,531) (16,833,322) Net change in unrealised gains/(losses) on financial assets at fair value through profit 8 or loss 5,816,408 14,917,560 5,995, ,348 25,262,530 Total operating income/(loss) 4,289,648 12,712, , ,849 15,982,649 Expenses Investment Management fees 9 (324,259) (1,358,291) (240,898) (31,394) (1,954,842) Audit fees (12,395) (16,769) (11,132) (8,989) (49,285) Administration fees 9 (29,581) (92,648) (36,000) (16,000) (174,229) Professional fees (9,486) (16,813) (10,979) (10,351) (47,629) Sub-Custodian fees 9 (37,613) (83,868) (28,197) (12,340) (162,018) Depository fees 9 (23,697) (42,663) (30,834) (20,833) (118,027) Management Company fees 9 (8,218) (25,597) (6,018) (891) (40,724) Interest expense - - (537) - (537) Organisational fees (11,324) (11,324) Other operating expenses (21,451) (36,370) (33,288) (13,758) (104,867) Net foreign exchange gains/(losses) (2,094) (62,049) 239,607 (12,756) 162,708 Total operating expenses (468,794) (1,735,068) (158,276) (138,636) (2,500,774) Profit/(loss) before taxation 3,820,854 10,977, , ,213 13,481,875 Other taxes 11 (16,069) (41,827) (48,289) (3,183) (109,368) Profit/(loss) for the year 3,804,785 10,935, , ,030 13,372,507 Other comprehensive income Total comprehensive income/(loss) for the year attributable to holders of redeemable shares from operations 3,804,785 10,935, , ,030 13,372,507 The results of the Company arise from continuing operations. * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). ** The sub-fund ADCB Islamic GCC Equity Fund was launched on 2 May 2016, therefore the Statement of Comprehensive Income for this sub-fund is covering the period from 2 May 2016 to 31 December * * The notes are an integral part of these financial statements. 13

16 L Luxembourg Statement of Comprehensive Income For the year ended 31 December 2015 Note ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund USD USD USD USD Income Dividend income 1,363,454 4,877,675 2,267,333 8,508,462 Interest income - - 1,307 1,307 Other income 5,981 50,634 22,562 79,177 Net realised gains/(losses) on financial assets at fair value through profit or loss 7 (6,330,075) (1,664,832) (2,441,900) (10,225,118) * Net change in unrealised gains/(losses) on financial assets at fair value through profit or loss 8 (1,187,644) (13,408,580) (7,542,623) (19,483,442) * Total operating income/(loss) (6,148,284) (10,145,103) (7,693,321) (21,119,614) Expenses Investment Management fees 9 (393,340) (2,011,941) (573,755) (2,979,036) Audit fees (16,828) (13,621) (16,848) (47,297) Administration fees 9 (35,554) (121,878) (53,230) (210,662) Professional fees (8,179) (13,240) (11,187) (32,606) Sub-Custodian fees 9 (40,668) (149,418) (76,518) (266,604) Depository fees 9 (22,423) (53,163) (30,144) (105,730) Management Company fees 9 (9,769) (29,329) (14,646) (53,744) Other operating expenses (20,254) (23,249) (33,234) (76,737) Net foreign exchange gains/(losses) (5,891) (63,349) (129,355) (198,595) Total operating expenses (552,906) (2,479,188) (938,917) (3,971,011) Profit/(loss) before taxation (6,701,190) (12,624,291) (8,632,238) (25,090,625) Other taxes 11 (18,674) (56,302) (83,718) (158,694) Profit/(loss) for the year (6,719,864) (12,680,593) (8,715,956) (25,249,319) Other comprehensive income Total comprehensive income/(loss) for the year attributable to holders of redeemable shares from operations (6,719,864) (12,680,593) (8,715,956) (25,249,319) * The results of the Company arise from continuing operations. * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). The notes are an integral part of these financial statements. 14

17 L Luxembourg Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares ADCB MSCI UAE Index ADCB Islamic GCC Equity ADCB UAE ADCB Arabian Fund Equity Fund Index Fund Fund ** Total USD USD USD USD USD Net assets attributable to holders of redeemable shares at beginning of the year 32,124, ,287,284 32,818, ,155,101 * Proceeds from issue of redeemable shares 257,054 4,061, ,697 5,676,050 5,616,522 * Payments on redemption of redeemable shares (3,690,572) (20,343,574) (21,402,450) (120,114) (45,556,710) Net increase/(decrease) from share transactions (3,433,518) (16,281,853) (20,780,753) 5,555,936 (39,940,188) * Total comprehensive income/(loss) for the year attributable to holders of redeemable shares 3,804,785 10,935, , ,030 13,372,507 * Increase/(decrease) in net assets attributable to holders of redeemable shares Net assets attributable to holders of redeemable shares at end of the year 371,267 (5,346,449) (20,472,093) 5,847,966 (26,567,681) 32,495, ,940,835 12,346,574 5,847, ,587,420 * ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund ADCB Islamic GCC Equity Fund ** Total Class R Class I Class R Class I Class R Class I Class R Class I Class X Number of redeemable shares - outstanding at the beginning of the year 4,616, ,000 13,030, ,000 3,870, , ,740,504 * - issued 34, ,136-78,827-72, ,000 46, ,214 * - redeemed (499,475) - (2,359,366) - (2,648,732) - (6,573) - (5,450) (5,519,596) - outstanding as at 31 December ,150, ,000 11,150, ,000 1,300, ,000 65, ,000 41,411 14,882,122 * Net asset value per redeemable share as at 31 December Class R, Class I & Class X * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). ** The sub-fund ADCB Islamic GCC Equity Fund was launched on 2 May 2016, therefore the Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares for this sub-fund is covering the period from 2 May 2016 to 31 December The notes are an integral part of the financial statements. 15

18 L Luxembourg Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares For the year ended 31 December 2015 ADCB SICAV - ADCB MSCI UAE Index ADCB UAE ADCB Arabian Fund Equity Fund Index Fund Total USD USD USD USD Net assets attributable to holders of redeemable shares at beginning of the year 41,824, ,319,596 22,416, ,166,693 Proceeds from issue of redeemable shares 12,246,689 18,421,557 59,273,631 88,992,999 * Payments on redemption of redeemable shares (15,226,334) (43,773,276) (40,155,662) (98,755,272) * Net increase/(decrease) from share transactions (2,979,645) (25,351,719) 19,117,969 (9,762,273) Total comprehensive income/(loss) for the year attributable to holders of redeemable shares (6,719,864) (12,680,593) (8,715,956) (25,249,319) * Increase/(decrease) in net assets attributable to holders of redeemable shares (9,699,509) (38,032,312) 10,402,013 (35,011,592) Net assets attributable to holders of redeemable shares at end of the year 32,124, ,287,284 32,818, ,155,101 * ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund Total Class R Class I Class R Class I Class R Class I Number of redeemable shares - outstanding at the beginning of the year 5,062,946-15,803,920-2,218,664-21,079,061 * - issued 1,408, ,000 1,887, ,000 5,895, ,008 9,358,999 * - redeemed (1,854,896) - (4,661,410) - (4,243,733) (8) (10,697,556) * - outstanding as at 31 December ,616, ,000 13,030, ,000 3,870, ,000 19,740,504 * Net asset value per redeemable share as at 31 December Class R & Class I * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). The notes are an integral part of the financial statements. 16

19 ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund ADCB Islamic GCC Equity Fund ** USD USD USD USD USD Profit/(loss) before taxation 3,820,854 10,977, , ,213 13,481,875 * Adjustments for: Net foreign exchange (gains)/losses Net realised (gains)/losses on financial assets at fair value through profit or loss Net change in unrealised (gains)/losses on financial assets and liabilities at fair value through profit or loss L Luxembourg Statement of Cash Flows 2,094 62,049 (239,607) 12,756 (162,708) 2,996,823 6,975,922 6,734, ,531 16,833,322 (5,816,408) (14,917,560) (5,995,586) (501,348) (25,262,530) * Operating cash flow before movement in working capital 1,003,363 3,097, ,802 (66,848) 4,889,959 Decrease/(increase) in receivable for unsettled trades Decrease/(increase) in other receivables - (173,418) 2,022 - (171,396) Increase/(decrease) in payable for unsettled trades - (97,943) - - (97,943) Increase/(decrease) in other payables (26,977) (262,067) 499,000 29, ,873 Other taxes paid (15,630) (44,668) (51,178) (2,927) (114,403) Payments for purchase of investments (2,431,811) (47,843,555) (3,295,803) (6,333,024) (54,904,193) * Proceeds from disposal of investments 4,954,432 61,463,193 22,473, ,294 89,854,137 Net cash from/(used in) operating activities 3,483,377 16,139,184 20,483,061 (5,409,588) 39,696,034 * Cash flows from financing activities Proceeds from issue of redeemable shares 257,054 4,061, ,697 5,676,050 5,616,522 * Payments on redemption of redeemable shares (3,690,572) (20,343,574) (21,402,450) (120,114) (45,556,710) Increase/(decrease) in redemption payable (100,000) (31,130) - - (131,130) Decrease/(increase) in subscription receivable - - 2,133-2,133 Net cash from/(used in) financing activities (3,533,518) (16,312,983) (20,778,620) 5,555,936 (40,069,185) * Net increase/(decrease) in cash and cash equivalents (50,141) (173,799) (295,559) 146,348 (373,151) Cash and cash equivalents at beginning of the year 407,742 2,152, ,089-3,461,204 Effect of exchange rate fluctuations 2,709 57,021 (301,392) 9,671 (231,991) Cash and cash equivalents at end of the year 360,310 2,035, , ,019 2,856,062 * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). ** The sub-fund ADCB Islamic GCC Equity Fund was launched on 2 May 2016, therefore the Statement of Cash Flows for this sub-fund is covering the period from 2 May 2016 to 31 December The notes are an integral part of these financial statements. 17

20 L Luxembourg Statement of Cash Flows For the year ended 31 December 2015 ADCB MSCI UAE Index Fund ADCB UAE Equity Fund ADCB Arabian Index Fund USD USD USD USD Profit/(loss) before taxation (6,701,190) (12,624,291) (8,632,238) (25,090,625) * Adjustments for: Net foreign exchange (gains)/losses 5,891 63, , ,595 Net realised (gains)/losses on financial assets at fair value through profit or loss 6,330,075 1,664,832 2,441,900 10,225,118 * Net change in unrealised (gains)/losses on financial assets and liabilities at fair value through profit or loss 1,187,644 13,408,580 7,542,623 19,483,442 * Operating cash flow before movement in working capital 822,420 2,512,470 1,481,640 4,816,530 Decrease/(increase) in receivable for unsettled trades 979,992 2,455,018-3,435,010 Decrease/(increase) in other receivables 11,865 11,544 (2,082) 21,327 (Decrease)/increase in payable for unsettled trades - (3,475,699) - (3,475,699) (Decrease)/increase in other payables (51,544) (301,538) 66,482 (286,600) Income tax paid - (417) (56,188) (56,605) Other taxes paid (20,607) (61,281) (26,317) (108,205) Payments for purchase of investments (15,317,407) (127,251,532) (49,203,852) (190,823,914) * Proceeds from disposal of investments 17,844, ,843,671 29,654, ,942,793 * Net cash from/(used in) operating activities 4,268,915 19,732,236 (18,085,392) 6,464,637 * Cash flows from financing activities Proceeds from issue of redeemable shares 12,246,689 18,421,557 59,273,631 88,992,999 * Payments on redemption of redeemable shares (15,226,334) (43,773,276) (40,155,662) (98,755,272) * (Decrease)/increase in redemption payable 100,000 31, ,130 Decrease/(increase) in subscription receivable - - (2,133) (2,133) Net cash from/(used in) financing activities (2,879,645) (25,320,589) 19,115,836 (9,633,276) * Net (decrease)/increase in cash and cash equivalents 1,389,270 (5,588,353) 1,030,444 (3,168,639) Cash and cash equivalents at beginning of the year Effect of exchange rate fluctuations (975,637) 7,804,075-6,828,438 (5,891) (63,349) (129,355) (198,595) Cash and cash equivalents at end of the year 407,742 2,152, ,089 3,461,204 * The combined total is adjusted for cross Sub-Funds holdings (refer to note 2(j)). The notes are an integral part of these financial statements. 18

21 Notes to the financial statements 1. GENERAL INFORMATION (the Company ) is an investment company with variable capital (société d investissement à capital variable - SICAV) incorporated on 9 April 2014 and authorized under Part 1 of the Law of 17 December 2010, as amended and in accordance with the provisions of the UCITS Directive and listed on the official list of UCITS approved by the CSSF. It is registered in Luxembourg with registration number B The Company has been incorporated for an unlimited duration with an initial share capital in the equivalent in USD of EUR 31,000 divided into 31 Shares of no par value. It is an umbrella fund which may be composed of one or more subfunds each of which has its own investment, subscription and profit allocation and/or distribution policies. In its capacity as nominee, Abu Dhabi Commercial Bank acts as custodian for feeder funds in the United Arab Emirates investing into the Company. Abu Dhabi Commercial Bank, in its capacity as nominee for the ultimate beneficial investors in the United Arab Emirates, is the main shareholder of the Company. Abu Dhabi Commercial Bank does not have any substantial beneficial ownership of the Company. The minimum capital of the Company is the equivalent in USD of EUR 1,250,000, as provided by Law, and this was achieved within 6 months after the date on which the Company has been authorised as UCITS under Luxembourg law. As of 31 December 2016, 4 Sub-Funds were active: ADCB MSCI UAE Index Fund has the objective to provide investors with investment returns which correspond closely to the total return of the MSCI UAE Index before fees and expenses. ADCB UAE Equity Fund has the objective to achieve medium to long-term capital growth and a reasonable level of income by investing primarily in equities of the United Arab Emirates listed on the Abu Dhabi Securities Market, Dubai Financial Market and the Nasdaq Dubai. ADCB Arabian Index Fund has the objective to provide investors with investment returns which correspond closely to the total return of the S&P Pan Arab Composite LargeMidCap Index before fees and expenses. ADCB Islamic GCC Equity Fund has the objective to achieve medium to long-term capital growth and a reasonable level of income by investing primarily in equities listed on recognized Gulf Cooperation Council ( GCC ) stock exchanges (launched on 2 May 2016). The Company's financial year begins on 1 January and ends on 31 December of each year. These financial statements have been prepared for the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements for the Company have been prepared in accordance with International Financial Reporting Standards ( IFRS ), as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The financial statements provide a reasonable presentation of the financial position, comprehensive income and cash flows of the Company, in accordance with the principle of going concern. The preparation of financial statements in conformity with IFRS may require the use of accounting estimates. It also may require management to exercise its judgement in the process of applying the Company s accounting policies. 19

22 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of Preparation (continued) The functional and presentation currency of the Sub-Funds is United States Dollars (USD). USD is the currency in which the Company measures its performance and reports its results, as well as the currency in which it receives subscriptions from its investors. Amounts presented in these financial statements were rounded to the nearest full unit. New and amended standards and interpretations Although the below new standards and amendments were applied for the first time in 2016, they did not have a material impact on the financial statements of the Fund. The nature and the impact of each new standard or amendment is described below: Amendment to IFRS 7, Financial instruments: disclosures, on servicing contracts This amendment adds additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset for the purpose of determining the disclosures required in relation to transferred securities. The amendment is effective for annual periods beginning on or after 1 January Amendment to IAS 1, Presentation of financial statements - Disclosure initiative The amendments to IAS 1 are made in the context of the IASB s Disclosure Initiative, which explores how financial statement disclosures can be improved. The amendments provide clarifications on a number of issues, including: Materiality - an entity should not aggregate or disaggregate information in a manner that obscures useful information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance. Disaggregation and subtotals - line items specified in IAS 1 may need to be disaggregated where this is relevant to an understanding of the entity s financial position or performance. There is also new guidance on the use of subtotals. Notes - confirmation that the notes do not need to be presented in a particular order. Other comprehensive income ( OCI ) arising from investments accounted for under the equity method the share of OCI arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income. Standards issued but not yet effective The Fund has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Fund s financial statements are disclosed below. The Fund intends to adopt these standards, if applicable, when they become effective. 20

23 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of Preparation (continued) Standards issued but not yet effective (continued) IFRS 9 Financial Instruments In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. IFRS 15 Revenue from Contracts with Customers IFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 January 2018, when the IASB finalizes their amendments to defer the effective date of IFRS 15 by one year. Early adoption is permitted. IFRS 16 Leases IFRS 16 specifies how the Company will recognise, measure, present and disclose leases. The standard provides a single lease accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16 s approach to lessor accounting substantially unchanged from its predecessor, IAS 17. IFRS 16 was issued in January 2016 and applies to annual reporting periods beginning on or after 1 January Amendments to IAS 7 Statement of Cash Flows In January 2016, the IASB issued amendments to IAS 7 Statement of Cash Flows with the intention to improve disclosures of financing activities and help users to better understand the reporting entities liquidity positions. Under the new requirements, entities will need to disclose changes in their financial liabilities as a result of financing activities such as changes from cash flows and non-cash items (e.g., gains and losses due to foreign currency movements). The amendment is effective from 1 January The Fund is currently evaluating the impact. Amendments to IAS 12 Recognition of Deferred Tax assets for unrealised losses Amendments made to IAS 12 in January 2016 clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset s tax base. The amendment is effective from 1 January The Fund is currently evaluating the impact. 21

24 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Financial Assets and Financial Liabilities at Fair Value through Profit or Loss Classification The Company has classified its financial assets as financial assets at fair value through profit or loss within the definition of IAS 39 Financial Instruments: Recognition and Measurement. The category of financial assets and financial liabilities at fair value through profit or loss comprises: Financial instruments held-for-trading. The held-for-trading securities are securities that are acquired or incurred principally for the purpose of generating a profit from short-term fluctuation in market prices. The Company had investments classified under this category as at 31 December Financial instruments designated at fair value through profit or loss upon initial recognition. These include financial assets and liabilities that are not held for trading purposes but are managed and their performance evaluated on a fair value basis in accordance with the Company s documented investment strategy. The Company had no such financial instruments as at 31 December Recognition The Company recognises a financial asset or a financial liability when, and only when, it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace are recognized on the trade date, i.e. the date that the Company commits to purchase or sell the asset. Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when: - The rights to receive cash flows from the asset have expired; or - The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and - Either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired. Initial measurement All financial instruments are recorded in the statement of financial position at fair value plus, in the case of financial instruments not at fair value through profit or loss, the transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Subsequent measurement After initial measurement, the Company measures all financial instruments which are classified at fair value through profit or loss at fair value. 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. 22

25 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Financial Assets and Financial Liabilities at Fair Value through Profit or Loss (continued) Subsequent measurement (continued) Subsequent changes in the fair value of those financial instruments are recorded in net change in unrealised gains/(losses) on financial assets at fair value through profit or loss in the statement of comprehensive income until the investment is derecognised, at which time the cumulative gain or loss is recognised as net realised gains/(losses) on financial assets at fair value through profit or loss in the statement of comprehensive income, or determined to be impaired, at which time the cumulative loss is recorded as impairment loss in the statement of comprehensive income. Interest earned and dividend income elements of such instruments are recorded separately in the statement of comprehensive income in Interest income and Dividend income respectively. Financial assets and liabilities at fair value through profit or loss are disclosed in the statement of financial position at fair value with gains or losses recognised in the statement of comprehensive income. Valuation of investments The fair value of financial instruments is based on their quoted market prices where available at the Statement of Financial Position date. Quoted investments and investments traded on over the counter markets are valued at their last traded price. Where prices are not available, investments are valued on the basis of the probable realisation value, estimated by the Board of Directors of the Company in good faith. Transaction costs Transaction costs are costs incurred to acquire financial assets or liabilities at fair value through profit or loss. They include fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the statement of comprehensive income as an expense. (c) Revenue recognition Dividend income Dividend income is recognised when the Company's right to receive the payment has been established, normally being the ex-dividend date. Dividend income is recognised gross of withholding tax, if any. (d) Expenses Each Sub-Fund is responsible for all normal operating expenses including administration fees and expenses of the Investment Manager and the Depositary, audit fees and charges incurred on the acquisition and realisation of investments. Such costs are expensed in the period to which they relate. (e) Foreign Exchange Translation The functional currency of the Company is USD. Transactions in foreign currencies are translated at the foreign currency exchange rate ruling at the date of the transaction. Assets and liabilities denominated in foreign currencies are translated to USD at the foreign currency closing exchange rate ruling at the Statement of Financial Position date. Foreign currency exchange differences arising on translation are recognised in the Statement of Comprehensive Income. 23

26 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Foreign Exchange Translation (continued) Foreign currency exchange differences relating to investments at fair value through profit or loss are included in net realised gains/(losses) on financial assets and liabilities at fair value through profit or loss. (f) Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand and deposits held at call with banks in an active market within original maturities of three months or less. (g) Taxation Under legislation and regulations prevailing in Luxembourg, the Company is subject to the "subscription tax" at the rate of 0.05% per annum, except for the sub-funds and share classes which benefit from a reduced tax rate of 0.01%, like money market sub-funds and the classes of shares dedicated to institutional investors (per annum of its net assets, such tax being payable quarterly on the basis of the value of the aggregate net assets of the Company at the end of the relevant calendar quarter). The value of assets represented by units held in Undertakings for Collective Investment is however exempt from the subscription tax provided such units have already been subject to this tax. No stamp duty or other tax is payable in Luxembourg on the issue of Shares. No Luxembourg tax is payable on the realised capital appreciation of the assets of the Company. (h) Significant accounting judgments and estimates The preparation of the Company s financial statements requires management to make judgments, estimates and assumptions that affect the amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the Company s assets or liabilities. Please refer to Note 15 for more details on accounting judgments and estimates. (i) Redeemable shares The redeemable shares are redeemable at the shareholders option and are classified as financial liabilities. The liabilities arising from the redeemable shares are carried at the redemption amount being the net asset value calculated in accordance with the prospectus. Each Sub-Fund issues distinct no par value shares in accordance with the conditions and procedures provided for in the relevant Sub-Fund specifications in the prospectus, without granting to existing Shareholders a preferential right to subscribe for the shares to be issued. ADCB MSCI UAE Index Fund, ADCB UAE Equity Fund and ADCB Arabian Index Fund have two classes of shares in issue, namely Class R (Retail) and Class I (Institutional). ADCB Islamic GCC Equity Fund has three classes of shares in issue, namely Class R (Retail), Class I (Institutional) and Class X (Income). Shares are issued and redeemed based on the respective Sub-Fund's net asset value per share, calculated by dividing the net assets of the respective Sub-Fund, in accordance with the prospectus, by the number of redeemable shares in issue. The prospectus requires that investment positions are valued on the basis of the last traded market price for the purpose of determining the trading net asset value per share for subscriptions and redemptions. 24