YAQEEN SAUDI EQUITY ETF FUND (formerly Falcom Saudi Equity ETF Fund) (Managed by Yaqeen Capital - formerly Falcom Financial. Services). YAQEEN SAUDI EQUITY ETF (formerly Falcom Saudi Equity ETF) (Managed by Yaqeen Capital – formerly Falcom Financial Services) FINANCIAL STATEMENTS. Statement of profit or loss and other comprehensive income 7 Statement of changes in net assets attributable to unitholders 8.
YAQEEN SAUDI EQUITY ETF FUND (formerly Falcom Saudi Equity ETF Fund) (managed by Yaqeen Capital – formerly Falcom Financial Services). SUMMARY OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2021. YAQEEN SAUDI EQUITY ETF FUND (formerly Falcom Saudi Equity ETF Fund) (managed by Yaqeen Capital – formerly Falcom Financial Services).
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (All amounts are in Saudi Riyals unless otherwise stated). Yaqeen Saudi Equity ETF (formerly Falcom Saudi Equity ETF) (the “Fund”) is a fund established pursuant to an agreement between Yaqeen Capital (formerly Falcom Financial Services) (the “Fund Manager”) and investors in the Fund (the “Unitholders”) ” ). The objectives of the Fund are to achieve long-term capital growth and gains through the idle investment of a basket of shares of companies listed on the Saudi Stock Exchange, with the aim of achieving a level of performance comparable to that of the index before fees and costs.
At the general meeting held on 17 Jumada al-Ula 1443 (H) corresponding to 21 December 2021 (G), the name of the fund manager was changed from "Falcom Financial Services" to "Yaqeen Capital". After the year-end, the fund changed its terms and conditions and the fund's name was therefore changed from "Falcom Saudi Equity ETF" to "Yaqeen Saudi Equity ETF". In relation to the shareholders, the fund manager regards the fund as an independent accounting unit.
The Fund is subject to the Investment Fund Regulations (the “Regulations”), published by CMA on 3 Dhul Hija 1427H (corresponding to 24 December 2006), as amended by the resolution of the Board of the CMA on 16 Sha'aban 1437H (corresponding to with May 23, 2016). ).
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BASIS OF PREPARATION 1 Statement of compliance
- Basis of measurement
- Functional and presentation currency
- Foreign currency transactions and balances
- Financial year
- Use of estimates and judgments
Furthermore, these annual accounts are prepared using the accrual basis and are based on the going concern principle. The fund does not have a clearly identifiable operating cycle and therefore does not present short-term and long-term assets and liabilities separately in the statement of financial position. These financial statements are presented in Saudi Riyal (SR), which is also the fund's functional currency.
Foreign currency transactions and balances are converted into Saudi Riyals at the exchange rates prevailing on the dates of the transactions. Cash assets and liabilities denominated in foreign currencies are translated into Saudi Riyals at the exchange rates prevailing at the statement of financial position date. Exchange rate differences from these transactions are included in the statement of profit and loss and other comprehensive income.
The Fund's business year begins on January 1 and ends on December 31 of each calendar year. In the regular course of business, the preparation of financial statements requires judgments, estimates and assumptions from management that affect the application of policies and the reported amounts of assets, liabilities, income and expenses. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
There are no areas of significant judgment or critical assumptions used in the preparation of these financial statements.
NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS TO EXISTING STANDARDS
New standards, interpretations and amendments effective in current year
New standards, interpretations and amendments not yet effective
- Financial instruments
- Initial recognition and measurement
- De-recognition of financial assets
- Classification and subsequent measurement of financial assets Financial assets are classified into the following specified categories
- Impairment of financial assets
- Classification and measurement of financial liabilities
- Fair value measurement
- Offsetting
- Equity attributable to unitholders
- Net assets value per unit
- Zakat and income tax
- Revenue recognition
- Management fee, custody fee and other expenses
- Management fee
- Other expenses
Classification and subsequent measurement of debt instruments depends on:. i) The Fund's business model for managing the asset; and (ii) The cash flow characteristics of the asset. Dividends, when they represent a return on such investments, are still recognized in the statement of income as 'Dividend income' when the Fund's right to receive payments is established. When available, the Fund measures the fair value of an instrument using the quoted price in an active market for that instrument.
The Fund measures instruments quoted in an active market at the market price because this price provides a reasonable approximation of the exit price. The net assets attributable to the unitholders consist of units issued and accumulated profit generated by the Fund. This entitles the holder to a pro rata share of the Fund's net assets in the event of the Fund's liquidation.
The instrument does not include any contractual obligation to deliver cash or any other financial asset other than the holder's rights to a proportionate share of the fund's net assets. The total expected cash flows attributable to the instrument over the life of the instrument are essentially based on the result, the change in the recognized net assets or the change in the fair value of the fund's recognized and unrecognized net assets over the life of the instrument. Aggregate cash flows based substantially on the profit or loss, the change in recognized equity or the change in the fair value of the fund's recognized and unrecognized equity; and.
The Fund's redeemable participating units meet the definition of putable instruments classified as equity instruments under IAS 32. Units of the Fund are only held in the Kingdom of Saudi Arabia at Yaqeen Capital (formerly Falcom Financial Services) branches by natural and corporate persons made available for purchase. . Dividend income is recognized in the statement of profit or loss when it is declared (ie when the Fund's right to receive the dividend is established).
The management and custody fee is based on predetermined rates as set out in the terms of the fund. According to the terms of the Fund, the annual rate of expenses of the Fund may not exceed 1% of the net value of the assets. The fund manager reimburses all other expenses paid on behalf of the fund in accordance with the terms of the fund.
CASH AND CASH EQUIVALENTS
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL) All Fund's financial assets are investments in shares of Saudi joint stock enterprises listed on the Saudi
OTHER LIABILITIES
Custody fee
Other expenses
CONTNGENCIES AND COMMITTMENTS
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued)
SEGMENT REPORTING
UNIT VALUE RECONCILIATION
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) No transfers between levels took place during the year.
FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) There were no transfers between the levels during the year
Level 2 Level 3 Total
- FINANCIAL INSTRUMENTS - RISK MANAGEMENT
- FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) a) Credit risk (continued)
- FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) iii) Price risk (continued)
- CAPITAL MANAGEMENT
- LAST VALUATION DAY
- APPROVAL OF THE FINANCIAL STATEMENTS
The following table shows the maximum exposure to credit risk for the components of the statement of financial position. The fund measures credit risk and expected credit losses using default probability, default exposure and given loss. However, the impact of ECL on these assets was insignificant as the Fund is not exposed to significant credit risk and has no history of failure to recover these balances.
The Fund Manager reviews the credit concentration of the investment portfolio depending on the counterparties. Liquidity risk is the risk that the Fund will have difficulty raising funds to meet its obligations related to financial liabilities. The Fund's Terms and Conditions provide for the subscription and redemption of units on trading days during the week and it is therefore exposed to the liquidity risk of meeting Unitholder redemptions.
The Fund's investments are easy to realize and the participations can be easily purchased at any time. The Fund Manager regularly monitors liquidity needs and aims to ensure that sufficient resources are available to meet any obligations as they arise, whether through new subscriptions, liquidation of the investment portfolio or by obtaining financing from related parties. The table below shows an analysis of financial assets and financial liabilities based on when they are expected to be collected or settled respectively.
Commission rate risk arises from the possibility that changes in specific market commission rates will affect the future profitability or fair value of financial instruments. At the statement of financial position date, the Fund is not exposed to significant commission rate risk as it does not have any financial instrument that carries a significant separate commission. ii) Currency risk. Currency risk is the risk that the value of a financial instrument will fluctuate due to a change in the foreign exchange rate.
As the Fund's financial assets and financial liabilities are denominated in its functional currency, the Fund is not subject to currency risk. iii). 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 and commission rate movements. The price risk arises mainly from uncertainty about the future prices of the financial instruments held by the Fund.
