AlAhli GCC Growth and Income Fund
Contents
A. Investment Fund Information ... 3
B. Fund Performance... 4
C. Fund Manager ... 7
D. Custodian ... 8
E. Auditor ... 9
F. Financial Statements ... 9
AlAhli GCC Growth and Income Fund A. Investment Fund Information
1. Investment Objective
The Fund seeks to achieve long-term growth, and income distribution through primarily investing in GCC equity markets with good potential growth in earnings and cash flows in accordance with the Shariah guidelines issued by the Fund Shariah Board.
2. Investment Policies
Investing primarily in shares of listed companies that meet the guidelines issued by the Shariah Board.
The Fund may invest in ETFs, local IPO's and Rump Offerings whenever possible.
Surplus cash may be invested in Shariah compliant Murabaha transactions and/or funds.
The Fund may also have a limited exposure to Sukuk.
3. Distribution of income and gain policy
The fund distributed about SR 4,300,000 (approximately SAR 0.035118* per Unit) to the Unitholders of the Fund on record on April 27th 2016.
The Fund distributed about SR 3,000,000 (approximately SAR 0.0247* per Unit) to the Unitholders of the Fund on record on August 30th 2016.
4. The fund's reports are available upon request free of charge.
B. Fund Performance
1. The following table shows a comparison of the following data for the last three years:
Net assets value at the end of each financial year.
Net assets value per unit at the end of each financial year.
Highest and lowest net asset value per unit for each financial year.
The number of units in issue at the end of each financial year.
Expense ratio.
Year 2016 2015 2014
AUM* 128,172,673.39 160,728,959.42 256,401,218.47
NAV per Unit* 1.19 1.24 1.49
Highest Price* 1.24 1.63 1.83
Lowest Price* 0.98 1.21 1.38
Number of Units 107,782,061.05 129,476,905.18 171515,916.20
Income Distribution 0.06 0.07 0.07
Expense Ratio 2.09% 2.19% 1.98%
* In Saudi Riyal
2. Total return for 1 year, 3 years, and 5 years:
Period 1 Year 3 Years 5 Years
Total Return 4.19% -0.58% 7.17%
3. Annual total return for the fund since its launch:
Year 2016 2015 2014 2013 2012
Return 4.19% -13.32% 8.80% 27.37% 12.94%
Benchmark 6.89% -17.90% -9.21% 23.12% 6.06%
4. Actual fees and fund expenses paid by the investment fund during the year:
Fees and Expenses Percentage of NAV
Management Fee 1.81%
Audit Fee 0.017%
Fund Administration Fee 0.113%
CMA Fee 0.005%
Tadawul Fee 0.004%
Shariah Audit Fee 0.019%
Fund Board Fee 0.012%
Custody Fee 0.068%
Total Fees 2.09%
5. Material Changes
The year under review was a volatile year for oil where oil witnessed three significant price swings. The first leg was a sharp correction of more than 20% to the bottom; the second leg was a recovery to $51 by mid-year. Lastly, oil traded sideways and ended the year in the mid-$50s after OPEC and non-OPEC members agreed to cut production. These huge swings played a role in the market’s volatile performance.
Generally speaking, GCC markets mirrored the swings in oil. The markets corrected with the first leg of oil decline. However, it covered these losses as oil prices improved, and markets where then driven by their own momentum and market specific dynamics.
6. Exercising of voting right
The following table contains shows the exercising of voting rights during the period including the issuer’s name, date of General Assembly, voting subject and decision. The fund manager abstained from voting on all subjects listed below.
COMPANY DATE OF AGM SUBJECT OF VOTING
ALDREES 2/3/2016
BoD Report, Consolidated financial statements, auditors report, distribution of cash dividend, runmeration of directors, discharge of members of BoD, Vote on recommendation of BoD to appoint the external auditors, Vote on related party trasnactions
RAJHI 28/3/2016
BoD Report, Consolidated financial statements, auditors report, distribution of cash dividend, runmeration of directors, discharge of members of BoD, Vote on recommendation of BoD to appoint the external auditors
ARABIAN
CEMENT 3/4/2016
BoD Report, Consolidated financial statements, auditors report, distribution of cash dividend, runmeration of directors, discharge of members of BoD, Vote on recommendation of BoD to appoint the external auditors
NATIONAL
SHIPPING 6/4/2016
BoD Report, Consolidated financial statements, auditors report, distribution of cash dividend, runmeration of directors, discharge of members of BoD
SAUDI CATERING 5/5/2016
BoD Report, Consolidated financial statements, auditors report, BoD recommendation on 6/5/2016,3/8/2015,20/10/2015, 3/3/2015 to distribute of cash dividends, Authorizing BoD to distrubute half yearly dividends or quarterly dividends, runmeration of directors, discharge of members of BoD, Vote on recommendation of BoD to appoint the external auditors, Vote on related party trasnactions
CITY CEMENT 31/5/2016
BoD Report, Consolidated financial statements, auditors report,
distribution of cash dividend, runmeration pay, Discharge of members of the BoD, vote on internal auditor, BoD compensation vote,
APPC 28/7/2016 Vote on bonus shares, Vote on BoD member YAMAMAH
STEEL 20/11/2016 BoD member selection, change on the company bylaws
7. Fund Board Annual Report:
The Board of Directors consists of the following members, who were appointed by the fund manager and approved by the Capital Market Authority:
1. Mohammed Abdullah Al-Ali Chairman of the Fund’s Board of Directors 2. Mohammed Jafar Saqaf non-independent member
3. Dr. Abdulrauof Solaiman Banajah independent member 4. Alaaeldden Riyad Sami independent member
The Fund's Board of Directors held three meetings during 2016. The following is a summary of the key decisions approved and the matters discussed by the Fund’s Board of Directors:
Fund’s performance review: the Fund appreciated by 4.19% underperforming the benchmark by 2.67% during 2016.
The fund board approved appointing KPMG Al Fozan & Partners as an external auditor.
The fund board approved changes to the Terms & Conditions in the cut-off time to subscribe to the Fund will be on the Dealing Day before or at 10:00 AM, instead of 11:00 AM.
The Fund Board approved the Fund Manager’s proposal to distribute gains to the Unitholders on record in pursuant to the Terms and Condition of the Fund.
Risks related to the funds; including: liquidity, market, operational risks.
Ensuring fund’s compliance to all applicable rules and regulations.
The effects of the updated Investment Funds Regulations on the fund.
C. Fund Manager
1. The Fund Manager is NCB Capital Company.
Address: King Saud Road, P.O. Box 22216, Riyadh 11495, Kingdom of Saudi Arabia, Tel: +966 920000232 Fax +966 114060049 Website: www.ncbc.com
2. Sub-manager / investment adviser None
3. Investment activities
On the back of volatile oil prices during the year, the fund witnessed some changes to stock selection and sector allocation to limit any adverse effects to performance.
4. Fund’s performance
AlAhli GCC Growth & Income Fund appreciated by 4.19% underperforming the benchmark by 2.67%
during 2016.
5. T&C’s Material Changes
The Fund Manager has made certain revisions to the terms and conditions of the Fund. The main change in the terms and conditions relate to change in the borrowing right, rebate language and auditors from Ernst & Young to KMPG to KPMG Al Fozan & Partners.
6. The fund does not invest substantially in other investment funds.
7. No special commissions were received by the fund manager during 2016
D. Custodian
1. NCB Capital is the Custodian to the Fund.
Address: King Saud Road, P.O. Box 22216, Riyadh 11495, Kingdom of Saudi Arabia, Tel: +966 920000232 Fax +966 114060049 Website: www.ncbc.com
2. Custodian’s duties and responsibilities
The custodian shall be held responsible to the fund manager and unitholders for any losses caused to the investment fund due to the custodian fraud, negligence, misconduct or willful default.
The custodian shall be responsible for taking custody and protecting the fund's assets on behalf of unitholders, and taking all necessary administrative measures in relation to the custody of the fund's assets.
3. Custodian’s opinion
NCB Capital Co. hereby confirms that we Issued, transferred and redeemed the units in accordance with the provision of the IFR and Fund T&Cs.
NCB Capital Co. hereby confirms that we valued and calculated the Unit price in accordance with the provisions of IFR, Fund T&Cs and Information Memorandum.
NCB Capital Co. hereby confirms that we have not breached any of the Investment Restrictions, Limitations and borrowing powers applicable to IFR.
E. Auditor
1. KPMG Al Fozan & Partners is the Auditor of the fund
Saudi Arabia, Jeddah, Zahran Business Center, Prince Sultan Street,
Tel: +966 12 6989595 Fax: +966 12 6989494 Website: www.kpmg.com/sa 2. Auditor’s opinion:
The financial statements have been prepared and audited in accordance with SOCPA standards.
F. Financial Statements
