Al Rajhi Multi Asset Conservative Fund (Managed by Al Rajhi Capital)
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REVIEW REPORT
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2019
AL RAJHI MULTI ASSET CONSERVATIVE FUND Interim condensed statement of financial position (unaudited)
As at 30 June 2019
The accompanying notes 1 to 9 form an integral part of these interim condensed financial statements.
2
Note
30 June 2019 (Unaudited)
SR
31 December 2018 (Audited)
SR
ASSETS
Cash and cash equivalents 66,051 73,239
Financial assets at fair value through profit or loss 4 36,026,249 36,280,486
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TOTAL ASSETS 36,092,300 36,353,725
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LIABILITY
Accrued expenses 17,442 39,688
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TOTAL LIABILITY 17,442 39,688
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EQUITY
Net assets attributable to unitholders of redeemable units 36,074,858 36,314,037
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TOTAL LIABILITY AND EQUITY 36,092,300 36,353,725
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Redeemable units in issue 81,164 84,339
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Net asset value attributable to each per unit 444.47 430.57
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Interim condensed statement of comprehensive income (unaudited)
For the six-month period ended 30 June 2019
The accompanying notes 1 to 9 form an integral part of these interim condensed financial statements.
3
2019
SR 2018
SR
INCOME
Net unrealized gain on financial assets at fair value through profit or loss 757,220 544,002 Net realized gain on financial assets at fair value through profit or loss 354,495 64,453
Dividend income 57,691 94,126
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TOTAL INCOME 1,169,406 702,581
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EXPENSE
Other expenses (26,005) (25,748)
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NET INCOME FOR THE PERIOD 1,143,401 676,833
OTHER COMPREHENSIVE INCOME FOR THE PERIOD - -
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TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,143,401 676,833
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AL RAJHI MULTI ASSET CONSERVATIVE FUND Interim condensed statement of changes in equity (unaudited)
For the six-month period ended 30 June 2019
The accompanying notes 1 to 9 form an integral part of these interim condensed financial statements.
4
2019
SR 2018
SR EQUITY AT THE BEGINNING OF THE PERIOD 36,314,037 30,456,215
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Net income for the period 1,143,401 676,833
Other comprehensive income for the period - -
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Total comprehensive income for the period 1,143,401 676,833
Issue of units during the period 1,930,067 13,995,619
Redemption of units during the period (3,312,647) (3,727,146)
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EQUITY AT THE END OF THE PERIOD 36,074,858 41,401,521
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Units Units
REDEEMABLE UNIT TRANSACTIONS
Transactions in redeemable units during the period are summarised as follows:
UNITS AT THE BEGINNING OF THE PERIOD 84,339 72,105
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Issue of units during the period 4,394 32,815
Redemption of units during the period (7,569) (8,737)
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Net (decrease) increase in units (3,175) 24,078
───────── ─────────
UNITS AT THE END OF THE PERIOD 81,164 96,183
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Interim condensed statement of cash flows (unaudited)
For the six-month period ended 30 June 2019
The accompanying notes 1 to 9 form an integral part of these interim condensed financial statements.
5
2019
SR 2018
SR
Operating activities
Net income for the period 1,143,401 676,833
Adjustments to reconcile net income to net cash flows from (used in) operating activities:
Movement in unrealised gains on financial assets at fair value through
profit or loss (757,220) (544,002)
Working capital adjustments:
Decrease (increase) in financial assets at fair value through profit or loss 1,011,457 (10,390,267)
Decrease in accrued expenses (22,246) (20,712)
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Net cash flows from (used in) operating activities 1,375,392 (10,278,148)
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Financing activities
Proceeds from issuance of units 1,930,067 13,995,619
Payment on redemption of units (3,312,647) (3,727,146)
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Net cash flows (used in) from financing activities (1,382,580) 10,268,473
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Net decrease in cash and cash equivalents (7,188) (9,675)
Cash and cash equivalents at the beginning of the period 73,239 56,185
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Cash and cash equivalents at the end of the period 66,051 46,510
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Operational cash flows from dividends:
Dividends received 57,691 94,126
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AL RAJHI MULTI ASSET CONSERVATIVE FUND Notes to interim condensed financial statements (unaudited)
At 30 June 2019
6 1. INCORPORATION AND ACTIVITIES
Al Rajhi Multi Asset Conservative Fund (the "Fund") is an open-ended investment fund created by an agreement between Al Rajhi Capital (the “Fund Manager”), a wholly owned subsidiary of the Al Rajhi Banking and Investment Corporation (the “Bank”) and investors (the “Unitholders”) in the Fund. The address of the Fund Manager is as follows:
Al Rajhi Capital P.O. Box 5561 Riyadh 11432
Kingdom of Saudi Arabia
The Fund is designed for investors seeking to preserve and increase their capital in accordance with Islamic principles through investment in other investment funds. The Fund's net income is reinvested in the Fund, which affects the value and price per unit. The Fund was established on 24 Rabi Al Thani 1432H (corresponding to 29 March 2011).
The Fund has appointed AlBilad Investment Company (the “Custodian”) to act as its custodian and registrar. The fees of the custodian and registrar’s services are paid by the Fund.
The Fund Manager is responsible for the overall management of the Fund's activities. The Fund Manager can also enter into arrangements with other institutions for the provision of investment, custody or other administrative services on behalf of the Fund.
2. REGULATING AUTHORITY
The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by the Capital Market Authority (“CMA”) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) and effective from 6 Safar 1438H (corresponding 6 November 2016) by the New Investment Fund Regulations (“Amended Regulations”) published by the CMA on 16 Sha’aban 1437H (corresponding to 23 May 2016) detailing requirements for all funds within the Kingdom of Saudi Arabia.
3. BASIS OF PREPARATION AND CHANGES TO ACCOUNTING POLICIES
3.1. Basis of preparation
These interim condensed financial statements for the six-month period ended 30 June 2019 have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”).
The interim condensed financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Fund’s annual financial statements as at 31 December 2018.
The interim condensed financial statements have been prepared on a historical cost basis, using the accrual basis of accounting except for investments held at fair value through profit or loss that are measured at fair value. These interim condensed financial statements are presented in Saudi Arabian Riyals (“SR”), which is the Fund’s functional currency. All financial information presented has been rounded to the nearest SR.
3.2 New standards, interpretations and amendments
The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Fund’s annual financial statements for the year ended 31 December 2018.
There are new standards, amendments and interpretations apply for the first time in 2019, but do not have an impact on the interim condensed financial statements of the Fund.
There are other several amendments and interpretations that are issued, but not yet effective, up to the date of issuance of the Fund’s interim condensed financial statements. In the opinion of the Board, these will have no significant impact on the interim condensed financial statements of the Fund. The Fund intends to adopt those amendments and interpretations, if applicable.
Notes to interim condensed financial statements (unaudited) (continued)
At 30 June 2019
7
4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
The composition of the investments portfolio on the last valuation day of the period/year end is summarised below:
30 June 2019 (Unaudited)
% of Market
Value Cost SR
Market value
SR
Unrealised gain/(loss)
SR Investments
Al Rajhi Commodities Mudarabah Fund - Saudi Riyal 43.21 14,925,400 15,567,005 641,605 Al Rajhi Commodities Mudarabah Fund – USD 32.47 11,109,578 11,697,926 588,348
Al Rajhi Sukuk Fund 7.62 2,567,617 2,745,789 178,172
Al Rajhi Global Equity Fund 5.22 1,680,034 1,879,527 199,493
Al Rajhi Saudi Equity Income Fund 4.09 1,259,728 1,475,046 215,318
Al Rajhi MSCI Saudi Multi Factor Index Fund 3.46 1,205,000 1,246,092 41,092
Jadwa REIT Saudi Fund 1.52 507,973 547,956 39,983
Al Rajhi MENA Dividend Growth Fund 1.03 378,048 371,084 (6,964)
Al Rajhi REIT Fund 1.02 373,826 366,044 (7,782)
Derayah REIT Fund 0.36 122,096 129,780 7,684
─────── ───────── ───────── ─────────
Total 100.00 34,129,300 36,026,249 1,896,949
═══════ ═════════ ═════════ ═════════
31 December 2018 (Audited)
% of Market
Value Cost SR
Market value
SR
Unrealised gain/(loss)
SR Investments
Al Rajhi Commodities Mudarabah Fund - Saudi Riyal 46.68 16,395,585 16,934,894 539,309 Al Rajhi Commodities Mudarabah Fund – USD 31.41 10,959,578 11,397,261 437,683
Al Rajhi Saudi Equity Income Fund 7.24 2,440,436 2,624,968 184,532
Al Rajhi Sukuk Fund 7.32 2,567,617 2,656,123 88,506
Al Rajhi Global Equity Fund 4.90 1,815,752 1,778,135 (37,617)
Al Rajhi MENA Dividend Growth Fund 1.28 507,044 465,267 (41,777)
Al Rajhi REIT Fund 0.79 314,263 286,204 (28,059)
Mulkia Gulf Real Estate REIT 0.38 140,482 137,634 (2,848)
─────── ───────── ───────── ─────────
Total 100.00 35,140,757 36,280,486 1,139,729
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Investments in mutual funds are unrated. The Fund also does not have an internal grading mechanism. However, the Fund Manager seeks to limit its risk by monitoring each investment exposure and setting limits for individual investment.
5. TRANSACTIONS WITH RELATED PARTIES
In the ordinary course of its activities, the Fund transacts business with related parties.
The Fund Manager charges the Fund with charges such as, professional fees, Board of Directors' remuneration and any other expenses incurred on behalf of the Fund. Based on the agreement between the Fund and the Fund Manager, the Fund is not required to pay any fees for the management by the Fund.
Board of Directors’ fees amounting to SR Nil (30 June 2018: SR Nil) was charged during the period. As at 30 June 2019, Board of Directors’ fees amounting to SR Nil (31 December 2018: SR Nil) is payable to the Fund’s Board of Directors.
The units in issue at 30 June 2019 include Nil units held by the employees of the Fund Manager (31 December 2018:
Nil units). The units in issue at 30 June 2019 include Nil units held by the Fund Manager (31 December 2018: Nil units).
At the end of the period, the cash balance with the Bank is SR 56,167 (31 December 2018: SR 72,537).
AL RAJHI MULTI ASSET CONSERVATIVE FUND
Notes to interim condensed financial statements (unaudited) (continued)
At 30 June 2019
8 6. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Fund measures its investments in financial instruments, such as investments in funds, at fair value at each reporting date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Fund. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The fair value for financial instruments traded in active markets at the reporting date is based on their quoted price (bid price for long positions and ask price for short positions), without any deduction for transaction costs.
The Fund measures financial instruments at fair value at each interim condensed statement of financial position date.
The Fund has only investments at fair value through profit or loss which is measured at fair values and are classified within level 1 of the fair value hierarchy. Management believes that the fair value of all other financial assets and liabilities at the reporting date approximate their carrying values owing to their short-term tenure and the fact that these are readily liquid. These are all classified within level 2 of the fair value hierarchy. There were no transfers between various levels of fair value hierarchy during the current period or prior year.
7. MATURITY ANALYSIS OF ASSETS AND LIABILITY
The table below shows an analysis of assets and liability according to when they are expected to be recovered or settled respectively:
As at 30 June 2019 (Unaudited)
Within 12 months
After
12 months Total
SR SR SR
ASSETS
Cash and cash equivalents 66,051 - 66,051
Financial assets at fair value through profit or loss 36,026,249 - 36,026,249
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TOTAL ASSETS 36,092,300 - 36,092,300
═════════ ═════════ ═════════
LIABILITY
Accrued expenses 17,442 - 17,442
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TOTAL LIABILITY 17,442 - 17,442
═════════ ═════════ ═════════
As at 31 December 2018 (Audited)
Within 12 months
After
12 months Total
SR SR SR
ASSETS
Cash and cash equivalents 73,239 - 73,239
Financial assets at fair value through profit or loss 36,280,486 - 36,280,486
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TOTAL ASSETS 36,353,725 - 36,353,725
═════════ ═════════ ═════════
LIABILITY
Accrued expenses 39,688 - 39,688
───────── ───────── ─────────
TOTAL LIABILITY 39,688 - 39,688
═════════ ═════════ ═════════
Notes to interim condensed financial statements (unaudited) (continued)
At 30 June 2019
9 8. LAST VALUATION DAY
The last valuation day of the period/year was 30 June 2019 (year ended 31 December 2018: 31 December 2018).
9. APPROVAL OF THE INTERIM CONDENSED FINANCIAL STATEMENTS
These interim condensed financial statements were approved by the Fund’s management on 28 Dhul-Qadah 1440H (corresponding to 31 July 2019).
