Annual total return for the fund since inception: ﺴﻟﺍ. The Board of Directors consists of the following members, appointed by the fund manager and approved by the Capital Market Authority. The Fund ended the year with an allocation of 32% to Sukuk, 29% to income-generating investments such as REITs, operating leases, trade finance and agricultural investments, and 39% to the money market.
The fund underperformed the benchmark by 138 bps.ﺱﺎﺃﺃ ﺔﻄﻘﻧ 138 ﻕﺭﺎﻔ| %ﺆﻤﻟﺍ ﺀﺍﺩﺃDﻋ ﻕﻭﺪﻨﺼﻟﺍ ﺀﺍﺩﺃﺾﻔﺨﻧﺍ Terms and Conditions and Information Memorandum Material. The custodian bank must be held liable to the fund manager and the shareholder for any loss incurred by the investment fund as a result of the custodian bank's fraud, negligence, misconduct or willful default. The Trustee is responsible for taking custody and protecting the Fund's assets on behalf of the Unitholders and taking all necessary administrative measures in relation to the safekeeping of the Fund's assets.
The fund manager confirms that the responsibilities assigned to the trustee do not include ensuring the fund manager's compliance with the contents of subparagraphs (a, b, c) of paragraph (d-3) of Annex 5 of the regulations on investment funds “IFR”. AlAhli Multi-Asset Income Plus Fund (the “Fund”) is an open-end Shariah Compliant Investment Fund managed by NCB Capital Company (the “Fund Manager”), a subsidiary of The National Commercial Bank (“the Bank”), for the benefit of holders of the fund's assets. The Fund is established in accordance with Article 30 of the Rules on Investment Funds ("Rules") issued by the Capital Market Authority ("CMA").
The Fund is governed by the Regulations pursuant to resolution number dated 3 Dhul Hijja 1427H (corresponding to 24 December 2006), as amended by Resolution No.
BASIS OF ACCOUNTING
The objective of the fund is to achieve medium to long-term capital growth and to generate a higher return than that which can be achieved in money markets and fixed income transactions by investing in various securities and financial instruments of money markets, fixed income instruments and other investments Terms and Conditions The fund was approved by the CMA on 24 April 2016, corresponding to 17 Rajab 1437.
BASIS OF MEASUREMENT
FUNCTIONAL AND PRESENTATION CURRENCY
CHANGES IN FUND’S TERMS AND CONDITIONS There is no change in the terms and conditions of the Fund during 2020
CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (continued) 2 Receivables
SIGNIFICANT ACCOUNTING POLICIES (continued) 3 Financial assets and liabilities (continued)
Special commission income and expense
Separate commission income and expenses presented in the statement of comprehensive income include commission on financial assets and financial liabilities measured at amortized cost calculated on an effective interest/commission basis. In calculating special commission income and expenses, the effective interest/commission rate is applied to the gross book value of the asset (when the assets are not impaired by credit) or to the amortized cost of the liability. However, for financial assets that are credit-impaired after initial recognition, special commission income is calculated by applying the effective interest/commission rate to the amortized cost of the financial asset.
If the asset is no longer impaired by the loan, then the special commission income calculation reverts to the gross basis. Management fee expense is recognized in the statement of comprehensive income as the related services are performed. Accrued expenses and other payables are initially recognized at fair value and subsequently measured at amortized cost using the effective commission rate method.
The Fund Manager has assessed that the amendments have no significant impact on the Fund's financial statements. Standards / Interpretations and Amendments Amendments to IFRS 3 - Definition of a business Amendments to IAS 1 and IAS 8 - Definition of Material. Standards issued but not yet effective as of the date of issue of the Fund's financial statements are listed below.
Effective from periods beginning on or after the following date Amendments to IFRS 16 COVID-19 – Related lease. The above amended standards and interpretations are not expected to have a significant impact on the Fund's financial statements. In addition, the Capital Markets Authority, on March 1, 2021, has issued some amendments to the Regulation of Investment Funds and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Markets Authority.
The Fund Manager is currently in the process of evaluating the impact, if any, of these changes on the Fund's financial statements.
CASH AND CASH EQUIVALENTS
INVESTMENTS
UNITS TRANSACTIONS
In accordance with the requirements of the CMA circular dated 31 December 2017, the Fund calculates impairment provisions in respect of debt investments measured at amortized cost using the incurred loss model, while IFRS 9 requires provisions to be measured using the expected credit loss method (ECL). . This resulted in a difference between equity calculated in accordance with the CMA circular (“trading equity”) and in accordance with the requirements of IFRS 9 (“reported equity”). The issued units of the fund 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
These transactions were carried out on the basis of the fund's approved terms and conditions. The fund's activities expose it to a number 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, share 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 has no significant currency risk as most of the transactions are executed in SAR.
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 financial instruments held by the Fund. From the date of the statement of financial position, the Fund has investments in mutual funds.
The Fund is exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to meet an obligation. The Fund is exposed to credit risk for its investment measured at amortized cost, dividend receivables and bank balances. The Fund seeks to limit its credit risk by monitoring credit exposures, limiting transactions with specific counterparties and continuously evaluating the creditworthiness of counterparties. a) The General Approach under Expected Credit Loss (ECL).
The Fund recognizes loss provisions for ECL on financial assets that are debt instruments not measured at FVTPL. The Fund considers a debt security to have low credit risk when the credit risk rating is equal to the globally understood definition of 'investment grade'. The Fund also considers forward information in its assessment of significant deterioration of credit risk since inception, as well as the measurement of ECLs.
Lifetime
Lifetime
12-month
Lifetime-
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 potential liabilities as they arise, either through new subscriptions, liquidation of the investment portfolio or by borrowing short-term loans obtained by the fund manager.
The Fund manages its liquidity risk by investing primarily in securities that it expects to be able to liquidate within a short period of time.
APPROVAL OF THE FINANCIAL STATEMENTS
