The roles and responsibilities of the fund board هتايلوؤسمو قودنصلا ةرادإ سلجم راودأ .ج The responsibility of the members of the fund board. Ensure that the fund manager carries out its obligations in the best interests of the shareholders in accordance with IFRS and the fund's terms and conditions. A statement of any conflict or potential conflict of interest between the interests of a fund board member and the interests of the fund.
عقد مجلس إدارة الصندوق ثلاثة اجتماعات.
Names and addresses of Sub-Manager / Investment Adviser
Report of investment fund’s performance during the
Special commission received by the fund manager during the period
Period for the management of the person registered as fund manager
A disclosure of the expense ratio of each underlying fund at end of year and the weighted average expense
In relation to mutual funds, the fund operator is responsible for the operation of the mutual fund. The fund operator must keep books and records relating to the operation of the fund it operates. The fund operator must create an owner register and must maintain it in the kingdom in accordance with the investment association regulations.
The fund manager is responsible for the process of distributing dividends (if available) to unit holders. The fund manager must process requests for subscription or redemption of the fund in accordance with the terms and conditions of the fund. The fund manager is responsible for the calculation of the price of the property units and the valuation of the fund's assets.
In doing so, the fund manager will carry out a full and fair valuation in accordance with the fund's General Terms and Conditions. Managed by SNB Capital Company - formerly known as NCB Capital Company) CASH FLOW STATEMENT. Managed by SNB Capital Company - formerly known as NCB Capital Company) NOTES TO THE FINANCIAL STATEMENTS.
Alahli Diversified Saudi Riyal Fund (the “Fund”) is a Shariah-compliant open-end investment fund managed by SNB Capital Company (formerly known as NCB Capital Company) (“Fund Manager”), a subsidiary of the Saudi National Bank (formerly known as National Commercial Bank ) ("the bank"), for the benefit of the fund's unit holders. The Fund is established in accordance with Article 31 of the Rules on Investment Funds ("Rules") issued by the Capital Market Authority ("CMA").
BASIS OF ACCOUNTING
ALAHLI DIVERSIFIED SAUDI RIYAL FUND. Managed by SNB Capital Company - formerly known as NCB Capital Company) NOTES TO THE FINANCIAL STATEMENTS. NCB Capital Company completed its merger proceedings with the Samba Capital & Investment Management Company effective July 9, 2021 and the name was changed to SNB Capital Company. The Fund offers investors the opportunity to participate in trading transactions that comply with Shariah principles, invest in Sukuk and other mutual funds or instruments that comply with Islamic Shariah investment principles.
The terms and conditions of the Fund were originally approved by the Saudi Central Bank (“SAMA”) and subsequently endorsed by the CMA by its letter dated 16 December 2008. The Fund is governed by the Investment Fund Regulations (the “Regulations”) published is. by Capital Markets Authority (“CMA”) on 3 Dhul Hijja 1427 H (corresponding to 24 December 2006) subsequently amended on 16 Sha'ban 1437 H (corresponding to 23 May 2016). The Regulations were further amended (the “Amended Regulations”) on 17 Rajab 1442 H (corresponding to 1 March 2021), detailing requirements for all funds within the Kingdom of Saudi Arabia.
BASIS OF MEASUREMENT
FUNCTIONAL AND PRESENTATION CURRENCY
CHANGES IN FUND’S TERMS AND CONDITIONS
CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (continued) 3 Financial assets and liabilities
SIGNIFICANT ACCOUNTING POLICIES (continued) 3 Financial assets and liabilities (continued)
Financial assets measured at FVTPL are initially recognized on the trade date, which is the date on which the Fund becomes a party to the contractual provisions of the instrument. The Fund derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. or in which the Fund neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control of the financial asset. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount divided into the portion of the asset being derecognised) and the amount received (including any new assets received less any new liabilities received) is recognised. in the statement of comprehensive income.
The Fund enters into transactions whereby it transfers assets recognized in its statement of financial position but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, the transferred assets are not deducted. A provision is recognized when the fund has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources comprising economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. .
The Fund classifies financial instruments issued as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instruments. The redeemable units provide investors with the right to demand redemption for cash at a value proportional to the investor's share of the Fund's net assets on each redemption date as well as in the event of the Fund's liquidation. Redeemable units are classified as equity as they meet all of the following conditions:. it entitles the holder to a pro rata share of the Fund's net assets in the event of the Fund's liquidation;. it is in the class of instruments subordinate to all other classes of instruments;. all financial instruments in the class of instruments that are subordinate to all other classes of instruments have identical characteristics;. the instrument does not include any other features that would require classification as a liability; and. the total expected cash flow attributable to the instrument over its life is substantially based on the gain or loss, the change in recognized net assets or the change in the fair value of the recognized and unrecognized net assets of the Fund over the life of the instrument.
SIGNIFICANT ACCOUNTING POLICIES (continued) 7 Units in issue (continued)
SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH AND CASH EQUIVALENTS
INVESTMENTS
Net investments measured at amortized cost a) Murabaha placements are held with local and international banks. According to the requirements of CMA circular dated 31 December 2017, the Fund calculates provisions for impairment in respect of financial instruments measured at amortized cost using the incurred loss model, while IFRS 9 requires provisions to be measured using the Expected Credit Loss (ECL) method. This led to a difference between equity calculated according to the CMA circular (“trading interest”) and according to the requirements of IFRS 9 (“reported equity”).
The Fund's issued units are classified as equity in accordance with IAS 32 and are therefore equal to the residual value of the Fund.
RELATED PARTY TRANSACTIONS AND BALANCES
RELATED PARTY TRANSACTIONS AND BALANCES (continued) Transactions with related parties
The Fund's activities expose it to a variety of financial risks, including market risk, credit risk, liquidity risk and operational risk. The Fund Board supervises the Fund Manager and is ultimately responsible for the overall management of the Fund. Monitoring and control of risks is primarily set up to be carried out based on the limits set by the Fund Board.
Market risk' is the risk that changes in market prices – such as commission rates, foreign exchange rates, equity prices and credit spreads – will affect the Fund's income or the fair value of its holdings in financial instruments. a) Foreign exchange risk. The fund does not have any foreign exchange risk as all transactions are carried out in SAR. The other price risk is the risk that the value of the Fund's financial instruments will fluctuate as a result of changes in market prices caused by factors other than foreign exchange rate movements and commissions.
The price risk arises mainly from uncertainty about the future prices of financial instruments held by the Fund. The Fund Manager monitors equity risk concentration on a daily basis by security and sector, in line with defined limits, while closely monitoring portfolio level volatilities. At the balance sheet date, the Fund has investments in the SNB Capital Saudi Riyal Trade Fund (“Investee Fund”) which are exposed to other price risks.
The credit quality of financial assets is managed using ratings from reputable credit rating agencies. The Fund Manager also reviews the credit concentration of the investment portfolio based on the geographic locations of the counterparties. Since the Fund has all its investments in Saudi Arabia, the Fund is therefore not exposed to credit risk related to geographic distribution.
The following table explains the changes in the expected credit loss of Murabaha and Sukuk contracts carried at amortized cost:.
12-month
Lifetime
Lifetime - credit
- FINANCIAL RISK MANAGEMENT (CONTINUED)
- LAST VALUATION DAY
- EVENTS AFTER THE END OF THE REPORTING PERIOD
- APPROVAL OF THE FINANCIAL STATEMENTS
As of December 31, 2021 and December 31, 2020, the fund has investments measured at amortized cost with the following credit quality: Liquidity risk is the risk that the fund may not be able to generate sufficient cash to settle its obligations in full when they fall due, or may only be able to do so under materially unfavorable conditions. The terms and conditions of the fund provide for the subscription and redemption of property units every Saudi business day, so it is exposed to the liquidity risk of fulfilling the redemptions of property unit holders on these days.
The Fund Manager monitors liquidity requirements by ensuring that sufficient funds are available to meet any commitments as they arise, whether through new subscriptions, liquidation of the investment portfolio or by obtaining short-term borrowing facilities obtained by the Fund Manager. The contractual and expected maturity of all liabilities outstanding at the reporting date are within six months (2020: maturity within six months). Operational risk is the risk of direct or indirect loss arising from a variety of causes related to the processes, technology and infrastructure that support the Fund's activities either internally or externally at the Fund's service provider and from external factors other than credit, liquidity, currency and market. risks such as those arising from legal and regulatory requirements.
The Fund's objective is to manage operational risk to strike a balance between limiting financial losses and damage to its reputation and achieving its investment objective of maximizing returns to unitholders. The primary responsibility for the development and implementation of operational risk management lies with the Risk Management Team.
