This Fund is in compliance with the Investment Funds Regulations issued by the Capital Market Authority of the Kingdom of Saudi Arabia

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1 Information Memorandum This Fund is in compliance with the Investment Funds Regulations issued by the Capital Market Authority of the Kingdom of Saudi Arabia Fund Name (Open-Ended Collective Investment Scheme) Fund Manager Alkhabeer Capital Investors should carefully read the Information Memorandum before taking any investment decision regarding the Fund. If an investor has any doubt about the suitability of the Fund, he or she should contact an independent financial advisor. A person making an investment in the Fund does so entirely at his or her own risk and responsibility. 1

2 Important Notice Potential investors should read this Information Memorandum before making any investment decision regarding the Fund. The Fund will employ a high risk investment strategy and details regarding the associated risks can be found in the Principal Risks of Investing in the Investment Fund section of this Information Memorandum. This is an open-ended collective investment scheme issued in accordance with the Investment Funds Regulations issued by the Capital Market Authority of the Kingdom of Saudi Arabia. This Information Memorandum contains full, true and plain disclosure of all material facts relevant to the Fund. Potential investors should not consider the opinions and views of the Fund Manager as recommendations to invest in the Fund. The Fund will primarily focus on medium to long term investments. Prospective investors should appreciate that as a result of changing law or practice as to how the Fund or the Unitholders will be regarded by tax authorities in different jurisdictions, they should consult their professional advisors about the possible tax consequences of subscribing, holding, redeeming, transferring, or selling of Units under the laws of their countries of citizenship, residence, ordinary residence, or domicile. The Unitholder shall be responsible for payment of tax, if any, on their investment in the Fund or on any capital appreciation derived therefrom. The payment of Zakat shall be the sole responsibility of the Unitholders. Any material change to this Information Memorandum must be approved by the CMA and all Unitholders will be notified about the change. This Information Memorandum was issued on 1 June

3 Fund Directory Fund Name Fund Manager Alkhabeer Capital PO Box Jeddah Kingdom of Saudi Arabia Tel: Fax: CR No: CMA License No: Administrator and Custodian Alkhabeer Capital Auditor Ernst & Young PO Box 1994 Jeddah Kingdom of Saudi Arabia Tel: Fax:

4 Fact Sheet Fund Currency Risk Level Benchmark Investment Objective Saudi Arabian Riyal (SAR) High Risk S&P Saudi Shariah Index To achieve long-term capital appreciation by investing in Shari acompliant Saudi listed companies Minimum Initial Subscription SAR 10,000 Minimum Additional Subscription SAR 10,000 Minimum Redemption SAR 10,000 Days of Accepting Subscription/ Redemption Requests On any Business Day Cut off time for Receiving Subscription/Redemption Before twelve noon on the Business Day preceding the Valuation Day Requests Valuation Day Payment of Redemption Proceeds Subscription Fee Management Fee Custodian/ Administration Fee Date of Commencement Date of Investment Unit Price Sunday and Tuesday of each week. When any such day is not a Business Day, the Valuation Day, is the immediate following Valuation Day On the third Business Day after the relevant Valuation Day Up to 1% of the subscription amount. This fee will be exclusive of the subscription amount 1.25% per annum of the NAV Included in the Management Fee 1 June 2013, or any other date as determined by the Fund Board 1 July 2013, or any other date as determined by the Fund Board SAR 1,000 (for subscriptions during the initial offering period) 4

5 Table of Contents Glossary 6 Terms and Conditions 7 1. Name of the Investment Fund 7 2. Address of the Head Office of the Fund Manager 7 3. Date of Commencement 7 4. Regulator 7 5. Date of the Terms and Conditions (issued or last updated) 7 6. Minimum Subscription or Redemption 7 7. Currency of the Fund 7 8. Fund Objective 7 9. Principal Investment Strategy Principal Risks of Investing in the Fund Fees and Expenses Dealing Costs Winding-Up and the Appointment of a Liquidator Fund Board Fund Manager Custodian and Administrator Auditor Annual Audited Financial Statements Characteristics of the Units Shari a Advisor Initial Offer Investment by the Fund Manager in the Fund Subscription and Redemption Procedures Valuation of the Assets of the Fund Termination Reporting to Unitholders Conflicts of Interest Voting Rights Policies Changes to the Information Memorandum Complaints Procedure Governing Law Compliance with Regulations 15 Disclosure 16 Appendix 1: Summary Financial Disclosure 17 Appendix 2: Shari a Guidelines 18 5

6 Glossary Business Day Calendar CMA Custodian & Administrator Date of Commencement Date of Investment Fund Fund Board Fund Manager NAV NAV per Unit Regulations SAR Terms and Conditions Unit Unitholder Valuation Day Day on which banks and capital markets are open for business in the Kingdom of Saudi Arabia Gregorian Calendar The Capital Market Authority of the Kingdom of Saudi Arabia Alkhabeer Capital 1 June 2013, or any other date as determined by the Fund Board 1 July 2013, or any other date as determined by the Fund Board. The date on which investment begins and Net Asset Value (NAV) of the Fund is first calculated The board of directors of the Fund as indicated in the Terms and Conditions of the Fund s Information Memorandum Alkhabeer Capital Net Asset Value of the Fund NAV divided by the number of Units outstanding The Investment Funds Regulations issued by the CMA Saudi Arabian Riyal The terms and conditions of the Fund included in this Information Memorandum Each Unit represents an equal common interest in the Fund Holder of Units in the Fund Sunday and Tuesday of each week. When any such day is not a Business Day, the Valuation Day is the immediate following Valuation Day 6

7 Terms and Conditions 1. Name of the Investment Fund. 2. Address of the Fund Manager s Head Office Alkhabeer Capital Madinah Road (north) PO Box Jeddah Kingdom of Saudi Arabia 3. Date of Commencement The Fund will commence subscriptions on 1 June 2013, or any other date as determined by the Fund Board. 4. Regulator The Fund Manager is licensed and regulated by the CMA, license no to engage in (i) dealing (1) as principal (2) underwriter, (ii) arranging, (iii) advising, (iv) managing, and (v) custody. 5. Date of the Terms and Conditions (Issued or last Updated) 1 June Minimum Subscription or Redemption The minimum initial subscription (exclusive of Subscription Fee) and additional subscription is ten thousand Saudi Riyals (SAR 10,000). The minimum redemption amount is also ten thousand Saudi riyals (SAR 10,000). 7. Currency of the Fund Saudi Arabian Riyal, in case of subscription in another currency, the prevailing exchange rate will apply. 8. Fund Objective To achieve long term capital appreciation by investing in Shari a-compliant Saudi listed companies. The performance of the Fund will be benchmarked against the S&P Saudi Shariah Index. 9. Principal Investment Strategy Investment Strategy The strategy is to invest in Shari a compliant Saudi listed securities with attractive valuations relative to their growth potential. Security selection is based on fundamental analysis and comprehensive due diligence, including research and analysis of the business and the industry in which the company operates, its competitive positioning and income growth potential. Dividends received, if any, will be re-invested in the Fund.The majority of the Fund s assets will be invested in equities. However, the Fund Manager has the discretion to hold cash and invest in short-term Shari a compliant money-market instruments (including Murabaha funds offered by the Fund Manager or its affiliates, provided that it is in the best interests of the Unitholders). The Fund Manager may obtain Shari a compliant financing of up to 10% of the Fund s NAV, at the date of borrowing. 7

8 Terms and Conditions 10. Principal Risks of Investing in the Fund Unitholders bear the financial risks associated with investment in the Fund. An investment in the Fund is not a deposit with any local bank sponsoring, selling or otherwise affiliated with the Fund. Nor should it be considered as a fixed deposit with an institution specialized in investment and finance. The price of the Units may go down as well as up. Upon redemption, an investor may not receive the full amount invested. All prospective investors are required to make their own determination, with their own financial and legal advisors, and evaluate all risks involved. The following list of risks does not purport to be a summary of all the risks associated with an investment in the Fund but rather comprises only certain risks to which the Fund may be subject. Conflict of Interest Risk As a result of the wide variety of activities undertaken by the Fund Manager, its affiliates and members of the Fund Board, conflicts of interest between the various parties may arise. The Fund Board will endeavor to resolve any such conflict of interest on a best efforts basis. Credit Risk The Fund may invest cash in short-term Shari a compliant money-market instruments including Murabahas with various counterparties. The Credit risk is the risk that the counterparty to the Murabaha agreement fails to deliver its financial obligations on time, in full, or at all. The Fund Manager shall attempt to mitigate this risk by transacting only with highly rated reputable financial institutions with sound financial backing. General Economic Conditions The success of the Fund may be affected by general economic and market conditions such as, but not limited to, market sentiment, inflation, unemployment, taxation, economic uncertainty, and changes in government policies. Interest Rate Risk Fluctuations of interest rates in the short term or long term are likely to cause volatility of securities values which could have a positive or negative impact on the market value of the Fund s investment. Liquidity Risk Lack of liquidity in the market may have an adverse impact on the market value of the Fund s investment and restrict the Fund s ability to obtain sufficient cash. Liquidity may be required for investment purposes in line with Fund s Strategy or to meet redemption requests. In case, there is insufficient cash to meet redemption requests, the Fund Manager has the discretion to postpone redemption requests to the next Valuation Day. Market Risk The prices of equity securities are subject to high volatility and no assurance can be given as to the future performance of securities. Prospective investors should therefore be aware that the value of Units is likely to fluctuate. Regulatory Risks and/or Political Risks The Fund may be affected indirectly by uncertainties such as political developments and changes in government regulations in Saudi Arabia or internationally. 11. Fees and Expenses The Fund Manager, Custodian and Administrator are entitled to a fee based on the Shari a principle of Investment Agent (Wakalat-ul-Istismar) comprising the following: Subscription Fee A subscription fee of up to 1.0% of the subscription amount will be payable by investors to the Fund Manager. This fee will be exclusive of the subscription amount and will be charged at the time of subscription for Units. Management Fee The Fund Manager will receive a management fee equal to 1.25% per annum of the NAV, calculated and 8

9 Terms and Conditions accrued on each Valuation Day. The Fee will be payable within ten Business Days of the last Valuation Day of each Calendar month. The Custody and Administration Fee is included in the Management Fee. Additional Expenses The Fund will be responsible for all expenses, fees, other costs and liabilities incurred in managing and operating the Fund. Such expenses include, but are not limited to, Shari a advisory, external audit, remuneration of the Fund Board, regulator fees, Tadawul fees, legal advisory and publishing expenses. Such expenses shall be charged as they occur, on each Valuation Day. For details on the fees and expenses, please refer to Appendix 1: Summary Financial Disclosure. 12. Dealing Costs The Fund shall bear all dealing expenses related to the purchase and sale of its investments, including, but not limited to, brokerage and any other regulatory or government fees or charges, levied from time to time. 13. Winding-Up and the Appointment of a Liquidator Subject to the conditions detailed in Article 22 of the Regulations, the CMA has the right to appoint a replacement fund manager or liquidator for the Fund or take any other appropriate action. 14. Fund Board Subject to CMA approval, the Fund Board has been appointed for an initial term of 3 years by the Fund Manager. The Fund Board consists of four directors, including two independent directors (Mr. Hisham Koshak and Mr. Farouq Fouad Ghulam). Mr. Ammar Ahmed Shata has been appointed as the Chairman of the Fund Board. Set out below are brief biographical details of each of the directors: 1. Mr. Hisham A. Koshak (Independent Member) Hisham is the Chairman and Founder of HAYKALAH, a Saudi Islamic financial firm. Prior to establishing HAYKALAH, Hisham was a Vice-President at Swicorp. Prior to joining Swicorp, Hisham worked with National Commercial Bank. He has extensive experience in product development (banking), investment and finance; specializing in Shari a-compliant structured finance, investment appraisals, equity funds, IPO s, mergers & acquisitions, and business evaluation. He holds an MBA in marketing services and a bachelor s degree in marketing from Kensington University, California, United States and is a PhD candidate in Islamic Economics at the George Washington University, Washington, United States. 2. Mr. Farouq Fouad Ghulam (Independent Member) Farouq is the Executive Vice President of Saudi Projects Holding Group. He is the CEO of AlBateel AlOula Real Estate Company and sits on various Boards of Investment, Finance, Leasing and Real Estate companies and Investment funds. He has around 20 years of comprehensive experience in legal, Islamic Finance, Investment Funds and Financial Structuring. He had been an Executive Partner and MD at Alkhabeer Capital. Prior to that, he was Head of Product Development and Operational Risk at the National Commercial Bank where he was in-charge of launching & structuring funds. Prior to that, he was the GM and General Directorate of Specialized Funds Department at Al Tawfeek Co. for Investment Funds and he was the acting CEO for the company and AlAmin Bank in Bahrain. He holds an LLM degree, specializing and targeting the area of International Business and Trade Transactions from Washington College of Law, Washington DC, USA (where he focused also on International Finance and Business Feasibility & Operations) and holds a law degree from King Abdul Aziz University, Jeddah, KSA. 9

10 Terms and Conditions 3. Mr. Ammar Ahmed Shata (Chairman) Ammar is a founder and the Executive Director and CEO at Alkhabeer Capital. He has over 20 years of professional work experience in corporate and structured finance, asset management, investment banking, and Islamic product development. Ammar holds a master s degree in economic planning and a bachelor s degree in electrical engineering from the University of Southern California, United States. He is a CFA charter holder from the CFA Institute, United States. 4. Mr. Ahmed Saud Ghouth (Member) Ahmed is the Deputy CEO at Alkhabeer Capital Since Possesses more than 13 years of experience in Corporate Banking, Islamic Finance, Asset Management and Private Equity. Currently a board member of several real-estate, private and public equity funds. During his previous engagement with NCB, he gained extensive expertise in debt portfolio management and Islamic facility structuring. His responsibility to oversee Asset Management at Alkhabeer has exposed him further to a variety of real estate development and income producing funds as well as equity funds. Ahmed holds a bachelor s degree in accounting from King Fahad University of Petroleum and Minerals, Dhahran, Saudi Arabia. The Fund Board Directors are the Board Directors of other Funds managed by the Fund Manager: Name Fund Capacity Mr. Hisham A. Koshak Mr. Farouq Fouad Ghulam Mr. Ammar Ahmed Shata Mr. Ahmed Saud Ghouth Alkhabeer GCC Equity Fund Alkhabeer Liquidity Fund HASSEEN Alkhabeer GCC Equity Fund Alkhabeer Liquidity Fund HASSEEN Alkhabeer GCC Equity Fund Alkhabeer Liquidity Fund HASSEEN Alkhabeer GCC Equity Fund Alkhabeer Liquidity Fund HASSEEN Independent Director Independent Director Chairman Director The responsibilities of the Fund Board include but are not limited to the following: 1. Approving of all material contracts, policies and major reports relating to the Fund. 2. Overseeing and where appropriate, ratifying any conflicts of interest the Fund Manager has identified as per the Regulations. 3. Meeting at least twice annually with the Fund Manager s compliance officer, money laundering/terrorist financing reporting officer and/or compliance committee, and overseeing the Fund Manager s compliance with all applicable laws and regulations. 4. Approving of any recommendations made by a liquidator appointed according to Article 22 of the Regulations. 5. Ensuring the completeness, accuracy, and compliance with the Fund s Information Memorandum and any other document, contractual or otherwise, that includes disclosures relating to the Fund and/or the Fund Manager. 6. Ensuring that the Fund Manager executes its obligation in the best interest of the Unitholders, in accordance with the Information Memorandum of the Fund and the Regulations and the guidelines of the Shari a advisor. 7. Acting with integrity and for the benefit of the Fund and the Unitholders at all times. Independent Fund directors are remunerated for their services. Please see Appendix 1: Summary Financial Disclosure for the Fund Board s compensation. 10

11 Terms and Conditions 15. Fund Manager Alkhabeer Capital, the Fund Manager manages the Fund under the Commercial Registration No issued by the Ministry of Commerce in the Kingdom of Saudi Arabia, guided by the Information Memorandum of the Fund, approved by the CMA and the Fund Board. The Fund Manager is an Authorized Person under the CMA Authorized Persons Regulations License No and the address of the Fund Manager is as follows: Alkhabeer Capital Madinah Road P.O. Box Jeddah Kingdom of Saudi Arabia No other business activities or interests of the Fund Manager or its directors are likely to have any material conflicts of interest that may affect performance of its obligation to the Fund. The Fund Manager has not delegated any key Fund investment management functions to a third party. The Fund Manager will be responsible for the overall Fund management and administrative and custody activities of the Fund s assets. This includes Fund transaction processing, bookkeeping, financial reporting, cash transfers and investor communication. The Fund Manager is also authorized by the Fund Board to delegate any of the above functions to a third party. Neither the Fund Manager nor any affiliate of the Fund Manager, nor any member of the Fund Board, nor any of the Fund Manager s employees or agents shall be liable to any Unitholder for any loss, damages, costs, expenses or other liabilities suffered by the Unitholder or the Fund s assets, unless such outcome is caused by such persons willful misconduct, bad faith or negligent actions. 16. Custodian and Administrator Alkhabeer Capital has been appointed as the Custodian and Administrator of the Fund. The Custodian will not be responsible for any assets of the Fund which are outside the effective and exclusive control of the Custodian and not deposited with or held to the Custodian s order. The Administrator will be responsible for the general administration of the Fund, which includes amongst other things, valuation of assets, calculation of fees, and monitoring and reporting of the un-invested cash of the Fund. In determining the NAV, the Administrator may accept, use and rely on prices received from third parties including stock exchanges, electronic processing services, brokers, market makers or intermediaries and the Fund Manager, without verification, and shall not be liable to the Fund, any shareholder or any other person in doing so. Address of the Custodian and Administrator: Alkhabeer Capital Madinah Road PO Box Jeddah Kingdom of Saudi Arabia Auditor Ernst & Young has been appointed as the Auditor for the Fund. Address of the Auditor: Ernst & Young PO Box 1994 Jeddah Kingdom of Saudi Arabia 11

12 Terms and Conditions 18. Annual Audited Financial Statements: The Fund Manager will prepare unaudited financial statements at least semi-annually and provide access to the Unitholders to view these financial statements within forty-five days of the end of the relevant period. In addition, audited financial statements for the Fund as of the end of each Gregorian year will be prepared within ninety days of year end. Audited financial statements at the end of each fiscal year will be made available at the Fund Manager s headquarters and shall be mailed to Unitholders upon their written request free of charge. The audited financial statements will also be mailed to the CMA. The first annual financial statements will be prepared for the period beginning on the Date of Investment and ending on 31 December Characteristics of the Units The Fund Manager may issue an unlimited number of Units, all of the same class. Each Unit represents an equal common interest in the Fund and will be issued to the nearest four decimal places. Following a subscription, Unitholders will receive a written confirmation containing full details of the subscription. 20. Shari a Advisor Shariyah Review Bureau W.L.L. has been appointed as the Shari a Advisor to the Fund. The Shari a Advisor is a specialized company that provides Shari a review and auditing services. It is an associated member of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and a member of the General Council for Islamic Banks and Financial Institutions. The Shari a Advisor is licensed by the Central Bank of Bahrain to carry out ancillary services. Address of the Shari a Advisor: Shariyah Review Bureau W.L.L. PO Box Jeddah Kingdom of Saudi Arabia The Shari a Advisor has assigned the following 2 Shari a scholars to review and ensure the Shari a compliance of the Fund: 1. Sheikh Dr. Salah Fahad Al Shalhoob: Sheikh Dr. Salah is an Assistant Professor at the Islamic and Arabic Studies College of Applied Studies and a Manager at Al Tamauz Research Center for Islamic Banking and Finance at King Fahd University of Petroleum and Minerals, Dhahran, Kingdom of Saudi Arabia. He is also a member of several committees including the investment and finance committee at the International Islamic Foundation for Economics and Finance, under Islamic World League. He holds a PhD in Installment Sales in Islamic Law: Theory and Practice from the University of Edinburgh, United Kingdom. 2. Sheikh Dr. Osama Mohamed Saad Bahar Sheikh Dr. Osama is a Shari a advisor to several investment firms in the GCC region and also writes for regional newspapers and magazines. He is a member of the Shari a supervisory Board for various Islamic financial institutes such as International Investment Bank, Capinnova Bank, First Energy Bank and Sakana Holistic Housing Solutions. He was previously the Head of Shari a Compliance at Salam Bank, ABC Islamic Bank & Shamil Bank of Bahrain and was also an officer at Bahrain s Ministry of Justice and Islamic Affairs. He holds PhD from Lahaye University (Holland) and Masters Degree from Al Emam Al Awzae University, (Beirut). The Shari a Advisor will conduct annual reviews of the Fund to ensure that the Fund s operations and investments are in compliance with the Shari a Guidelines. Please see Appendix 2: Shari a Guidelines for details. The Shari a Advisor will be remunerated from the Fund assets for its services. Please see Appendix 1: Summary Financial Disclosure for details. 12

13 Terms and Conditions 21. Initial Offer The Initial Offer for subscription will commence on 1 June 2013 and end at 12 noon on the business day immediately prior to the Date of Investment. The minimum amount to initiate the Fund is SAR 5 million. In case the Fund Manager is unable to raise this amount during the initial offering period, the Fund Manager has the discretion to extend the offering period or initiate the Fund with a lower amount. During the initial offering period (expected to be 30 days from the Date of Commencement), the subscription amounts will be invested for the benefit of the investor in: 1. Alkhabeer Liquidity Fund Hasseen (short term and low risk Shariah-compliant Fund that invests in Murabaha and is managed by Alkhabeer Capital), in accordance with the Terms and Conditions of Alkhabeer Liquidity Fund Hasseen. The prospective investors should read and understand the Information Memorandum of Alkhabeer Liquidity Fund Hasseen and confirm the acceptance of the Terms and Conditions in case of investing the subscription amount in this fund. 2. Or invest the amounts, temporarily, directly in Murabaha transactions. During the initial offering period, the subscription monies invested in Alkhabeer Liquidity Fund Hasseen or Murabaha deposits will be charged the applicable fee and there will be no fee duplication. These investments will mature five Business Days prior to the Date of Investment and the net accrued income, if any, will be added to the subscription amount for each unitholder and invested in Alkhabeer Saudi Equity Fund. 22. Investment by the Fund Manager in the Fund The Fund Manager and any of its affiliates and funds managed by the Fund Manager and any of its affiliates may invest in the Fund from time to time at their discretion. Any such investment shall be treated as a subscription by the Fund Manager for Units in the Fund and consequently, the provisions contained in the Information Memorandum shall also apply to such investments and these investments, if any, will be disclosed at the end of each fiscal year. 23. Subscription and Redemption Procedures Subscription Procedures Prospective subscribers may subscribe to the Fund at a price of SAR 1,000 per Unit during the Initial Offering Period and thereafter on each Valuation Day (Sunday and Tuesday of each week) at the NAV per Unit, provided that a completed Subscription Form with cleared subscription monies is received by the Fund Manager by twelve noon on the Business Day immediately prior to the Date of Investment or the relevant Valuation Day. If the Subscription Form or cleared funds are received after the deadline, it will (unless otherwise determined by the Fund Manager) be treated as a request for subscription on the following Valuation Day. The Fund Manager is responsible for implementing anti-money laundering and know your customer procedures and reserves the absolute right to require further verification of the identity of the subscriber, or that of the person or entity on whose behalf the subscriber is applying for the purchase of the Units, and/or the source of funds. Pending the provision of verification or evidence required by the Fund Manager, the allotment of Units shall be postponed. The Fund Manager at its sole discretion reserves the right to reject any subscription for Units, in which event the subscription proceeds will be returned without income earned thereon or charges deducted therefrom within three Business Days of the date of such rejection. The Fund Manager reserves the right to share relevant information of the investors, for the purposes of satisfying internal compliance and anti-money laundering procedures, with the Fund s associates including the Custodian and Administrator. 13

14 Terms and Conditions Redemption Procedures Units may be redeemed by the Unitholder on any Valuation Day by submitting a Redemption Form to the Fund Manager by twelve noon on the Business Day immediately prior to the relevant Valuation Day. Redemptions must be for a minimum value of ten thousand Saudi riyals (SAR 10,000). If any redemption would reduce a Unitholder s investment in the Fund to an amount that is lower than the minimum initial subscription, the Fund Manager shall have full discretion to redeem the Unitholder s entire investment. Redemption proceeds will be remitted by wire transfer to the bank account designated by the Unitholder on the Redemption Form on the third Business Day after the relevant Valuation Day. In the event any Unitholder s investment results in a violation of the applicable regulations or laws, the Fund Manager reserves the right to completely or partially redeem Units. The Unitholder will be notified in writing of such redemption. The Fund Manager will not be in any way liable to any Unitholder by reason of such mandatory redemption. Based on anticipated redemption requests, the Fund Manager will attempt to maintain sufficient liquidity levels. However, if on any Valuation Day, total redemptions exceed 10% of the total number of Units outstanding on the previous Valuation Day, the Fund Manager may scale down all such redemption requests on a pro rata basis, provided that it shall give notice to the affected Unitholders. Redemption requests that are not met on any one Valuation Day shall have priority over new redemption requests on the following Valuation Day. Upon completion of a subscription or redemption, the investor will receive a confirmation containing full details of the transaction. 24. Valuation of the Assets of the Fund The NAV per Unit on each Valuation Day (Sunday & Tuesday) will be calculated to the nearest four decimal places by the Administrator, using the following formula: total assets of the Fund less total liabilities, divided by the total number of outstanding Units. Listed securities will be valued based on the closing market prices of the underlying securities on the Valuation Day. Murabaha contracts will be valued at cost plus the accrued profit as of the Valuation Day. Units in other Shari a compliant money market Funds will be valued based on the latest available NAV of the respective Fund. The NAV per Unit will be published on the Tadawul website and the Fund Manager s website ( on the Business Day following each Valuation Day. 25. Termination The Fund Manager reserves the right to terminate the Fund by giving at least sixty days written notice to the Unitholders after obtaining approval from the CMA. 26. Reporting to Unitholders Within thirty days from the end of each Calendar quarter, Unitholders will be sent a report by or mail, showing the NAV, NAV per Unit, and the number and value of the Units held. 27. Conflicts of Interest In case of any conflicts of interest, the Fund Manager will at all times have due regard to the duties it owes to the Fund and will treat each investor equally and will not give any preference to any individual investor. The Fund Board will endeavor to equitably resolve any conflicts between the Fund and other collective investment schemes involving the Fund Manager or any of its affiliates. Related party transactions, if any, shall be conducted on an arm s-length basis. The procedure for dealing with conflicts of interest will be made available to Unitholders upon a written request to the Fund Manager. 14

15 Terms and Conditions 28. Voting Rights Policies The Fund Manager s compliance officer and/or compliance committee and the Fund Board shall agree on the general policies in relation to voting rights available to the Fund as a result of certain holdings. The Fund Manager shall have the right but not the obligation to exercise voting rights associated with the investments held by the Fund. The Fund Manager must consult with the compliance officer and/or compliance committee before exercising voting rights associated with the investments held by the Fund. 29. Changes to the Information Memorandum The Fund Manager may, at any time and at its sole discretion, amend the Information Memorandum, subject to receiving prior approval from the Shari a advisor and CMA. The Fund Manager will notify the Unitholders by mail of the proposed changes and furnish them with a copy of the amended text. The amendments will become effective sixty days from the date of any such notice. 30. Complaints Procedure Complaints should be directed to the following address: Head of Compliance and Governance Alkhabeer Capital Madinah Road PO Box Jeddah Kingdom of Saudi Arabia The procedure for the handling of complaints will be made available to Unitholders upon a written request to the Fund Manager. 31. Governing Law This Information Memorandum is subject to the laws of the Kingdom of Saudi Arabia. This Information Memorandum will form an agreement between the Fund Manager and the investor. 32. Compliance With Regulations The Information Memorandum contains accurate, fair, and true representations and disclosures of all material facts relevant to the Fund and complies with the Regulations. 15

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17 Disclosure I/We have received, read and understood this Information Memorandum and confirm my/our acceptance of the Terms and Conditions by signing a copy of this document. Name: Date: Signature: Stamp (for institutions): PPM Serial No: 16

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19 Appendix 1: Summary Financial Disclosure Subscription Fee Management Fee Custodian/Administration Fee Aggregate compensation to independent Fund board members Shari a Advisor Fee Audit Fee Tadawul Registration Fee CMA Review Fee Up to 1% of the subscription amount 1.25% per annum of the NAV Included in the Management Fee SAR 26,000 per annum* Up to SAR 35,000 per annum* SAR 35,000 per annum* SAR 5,000 per annum SAR 7,500 per annum *Estimates based on agreements Note: Expenses are charged to the Fund as they occur on any Valuation Day 17

20 Appendix 2: Shari a Guidelines The business of the Fund shall at all times be conducted in compliance with Shari a, as determined by the Shari a Advisor. The Shari a Advisor has approved the following guidelines: Investment Guidelines The Fund shall not invest in companies involved in business activities related to the following: a. conventional banking or insurance or any other interest-related activity; b. the manufacture or distribution of alcohol; c. the manufacture or distribution of arms; d. gaming or gambling; e. the production, packaging, processing, or any other activity related to non-halal food and beverage products; or f. entertainment (including cinema, music, pornography, and the production or sale or distribution of such entertainment, such as television channels and radio stations); and g. any other activities not permissible under Shari a, as determined by the Shari a Advisor. Companies that engage in businesses in compliance with Shari a shall be subject to additional balance sheet analysis. Investments shall not be made in companies with the following financial ratios: a. total conventional debt (interest bearing) divided by the average market capitalization that is equal to or greater than 33%; b. accounts receivables divided by the average market capitalization that is equal to or greater than 49%; c. the sum of cash plus interest-bearing securities divided by the average market capitalization that is equal to or greater than 33%; and d. non-permissible income equal to or greater than 5% of revenue. In addition to investing in equities, the Fund may hold short-term Shari a-compliant investments or cash balances in non interest-bearing accounts so as to meet expenses or to avail itself of market opportunities as they may arise. The Shari a Advisor will periodically review these Investment Guidelines and determine the Shari a investment universe. Impure Income Returns derived from the Fund s investments may comprise an amount that is attributable, for Shari a purposes, to impure income earned or received. In these cases, the amount of any return, which is so attributed, will be calculated in accordance with the Shari a principles approved by the Shari a Advisor and purified thereafter. 18