Saudi Financial Equity Fund (Managed by Alawwal Invest Company, previously known as Saudi Hollandi Capital Company)

Transcription

1 (Managed by Alawwal Invest Company, previously known as Saudi Hollandi Capital Company) UNAUDITED INTERIM FINANCIAL STATEMENTS 30 JUNE

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3 INTERIM BALANCE SHEET As at 30 June Note 30 June 31 December (Audited) 30 June ASSETS Bank balance 7,663,812 7,504,725 8,545,486 Trading investments 4 29,767,821 30,603,570 28,786,710 Dividend receivable 209,149-82,350 37,640,782 38,108,295 37,414,546 LIABILITY Accrued expenses 48,834 69,527 33,596 NET ASSETS 37,591,948 38,038,768 37,380,950 Units in issue 1,091,712 1,209,988 1,308,559 Per unit value The accompanying notes 1 to 8 form an integral part of these interim financial statements. 2

4 INTERIM STATEMENT OF OPERATIONS For the six-month period ended 30 June Note INVESTMENT INCOME (LOSS) Trading income (loss), net 5 3,551,945 (2,192,411) EXPENSES Management fees 6 (336,170) (379,830) Other expenses (34,793) (40,386) (370,963) (420,216) NET INCOME (LOSS) FROM OPERATIONS 8 3,180,982 (2,612,627) The accompanying notes 1 to 8 form an integral part of these interim financial statements. 3

5 INTERIM STATEMENT OF CASH FLOWS For the six-month period ended 30 June OPERATING ACTIVITIES Net income (loss) from operations 3,180,982 (2,612,627) Adjustment for: Unrealised losses (gains) on trading investments 2,431,932 (477,289) 5,612,914 (3,089,916) Changes in operating assets and liability: Trading investments (1,596,183) 10,215,890 Accrued expenses (20,693) 33,596 Dividend receivable (209,149) (82,350) Net cash from operating activities 3,786,889 7,077,220 FINANCING ACTIVITIES Proceeds from sale of units - 759,400 Value of units redeemed (3,627,802) )2,763,507( Net cash used in financing activities (3,627,802) (2,004,107) INCREASE IN BANK BALANCE 159,087 5,073,113 Bank balance at the beginning of the period 7,504,725 3,472,373 BANK BALANCE AT THE END OF THE PERIOD 7,663,812 8,545,486 OPERATIONAL CASH FLOWS FROM DIVIDEND INCOME Dividend income received 643, ,448 The accompanying notes 1 to 8 form an integral part of these interim financial statements. 4

6 INTERIM STATEMENT OF CHANGES IN NET ASSETS For the six-month period ended 30 June NET ASSETS AT THE BEGINNING OF THE PERIOD 38,038,768 41,997,684 CHANGES FROM OPERATIONS Net income (loss) from operations 3,180,982 (2,612,627) CHANGES FROM UNIT TRANSACTIONS Proceeds from sale of units - 759,400 Value of units redeemed (3,627,802) (2,763,507) Net change from unit transactions (3,627,802) (2,004,107) NET ASSETS AT THE END OF THE PERIOD 37,591,948 37,380,950 UNIT TRANSACTIONS Transactions in units for the period ended 30 June are summarized as follows: Units Units UNITS AT THE BEGINNING OF THE PERIOD 1,209,988 1,375,690 Units sold - 28,074 Units redeemed (118,276) (95,205) Net decrease in units (118,276) (67,131) UNITS AT THE END OF THE PERIOD 1,091,712 1,308,559 The accompanying notes 1 to 8 form an integral part of these interim financial statements. 5

7 NOTES TO THE INTERIM FINANCIAL STATEMENTS At 30 June 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. 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 (). 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 ) by the New Investment Fund Regulations ( Amended Regulations ), published by the Capital Market Authority on 16 Sha aban 1437H (corresponding to 23 May ), 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. 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 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

8 NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 4 TRADING INVESTMENTS A summary of the trading investment portfolio on the last valuation day of the period is set out below: Description Cost Market value 30 June Al Rajhi Bank 5,908,727 6,975,000 NCB 5,234,177 4,779,900 Samba Financial Group 3,976,227 4,012,950 Banque Saudi Fransi 2,342,430 2,690,040 Riyad Bank 3,352,742 2,735,000 Alinma Bank 3,395,854 2,642,405 Saudi British Bank 2,078,385 2,011,500 Arab National Bank 1,855,062 1,613,520 Bank Al Jazira 1,035, ,809 Saudi Investment Bank 1,004, ,997 Alawwal Bank 596, ,550 Al Bilad Bank 96,250 95,150 30,876,377 29,767, December (Audited) Al Rajhi Bank 9,247,157 9,873,585 NCB 6,775,351 4,965,230 Samba Financial Group 4,155,722 3,944,627 Alinma Bank 3,395,854 2,614,645 Saudi British Bank 2,078,385 1,875,000 Banque Saudi Fransi 1,998,930 1,873,440 Riyad Bank 2,245,292 1,651,650 Arab National Bank 1,855,062 1,590,480 Bank Al Jazira 1,035, ,445 Saudi Investment Bank 1,004, ,318 Alawwal Bank 483, ,200 Bank Al Bilad 96, ,950 34,371,322 30,603, June Al Rajhi Bank 9,674,041 9,467,280 NCB 7,540,422 5,036,220 Samba Financial Group 4,767,044 3,669,150 Alinma Bank 3,601,367 2,403,040 Banque Saudi Fransi 2,123,863 1,717,425 Riyad Bank 2,386,604 1,662,880 Saudi British Bank 2,357,827 1,615,440 Arab National Bank 1,697,403 1,170,675 Bank Al Jazira 1,099, ,075 Saudi Investment Bank 1,064, ,885 Alawwal Bank 515, ,040 Al Bilad Bank 96,250 90,600 36,923,566 28,786,710 7

9 NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued) At 30 June 5 TRADING INCOME (LOSS), NET For the six-month period ended 30 June Realised gains (losses) 267,434 (3,346,498) Dividend income 852, ,798 Unrealised gains 2,431, ,289 3,551,945 (2,192,411) 6 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 (: 30 June ). 8 RESULTS OF OPERATIONS The results for the interim period may not be indicative of the annual operating results. 8