FUND MANAGER S REPORT. MUFAP s recommended format

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1 FUND MANAGER S REPORT Apr 12 ECONOMIC OUTLOOK With implementation of strategic monetary management, policy makers have been successful in containing inflationary pressures - with FY12-YTD CPI clocking in at 10.84% in April On a monthly basis, inflation climbed to 11.27% YoY primarily due to hike in petroleum and food prices. With only two months left till FY12 end, we anticipate that the government will be successful in maintaining inflation within 11%. That said, widening fiscal imbalance and currency depreciation will remain primary concerns over the upcoming monetary policy (June 2012), raising probability for a contractionary direction despite contained inflation. On the back of improved Pak-US relations, the World Bank recently announced a USD 1.8bn assistance program for Pakistan s energy projects which have been held in abeyance for some time now. Over the coming months, we anticipate further external flows and pledges to materialize, which shall allow the country to cope with upcoming IMF payments. Amidst significant principal and interest repayments to IMF, foreign reserves have provided the much needed support against currency devaluation anticipated at the start of FY12. Even though net reserves with SBP have consistently declined as the government has honored debt servicing, reserves in April consolidated at a sturdy USD 16.4bn due to the increase in reserves with scheduled banks. Pak Rupee depreciation has also stagnated and the currency currently trades at 90.6 per dollar. Going forward, the government will have to ensure financial stability, preserve foreign exchange reserves and support private investment in the economy by devising prudent policies. With structural reforms, good governance and prudent public debt management the economy can be lifted from the financial morass. MONEY MARKET REVIEW During April, the government continued to finance the burgeoning fiscal deficit by borrowing from central and scheduled banks, which in turn kept the money market volatile. By April 20, 2012, borrowing for budgetary support stood at PKR 1 trillion which squeezed the loanable funds available to the private sector a phenomenon detrimental for the economic growth. Furthermore, realizing the dependency of the market on OMO injections, the SBP has curtailed the amount of open market operations from PKR 300bn to PKR 150bn, further drying up market liquidity. In the two T-Bill auctions conducted over April 2012, the government accepted PKR 336bn against maturity of PKR 365bn, with cut-off rates unchanged in 3, 6 and 12 month bills. With inflationary pressure seemingly picking up in 4QFY12, there exist mixed sentiments on the upcoming discount rate, leading corporate investors towards shorter term money market instruments. We anticipate liquidity to remain tight as June 2012 closing approaches and expect yields on government securities to remain volatile. That said, materialization of any foreign funding (CSF, 3G auction) over coming months may improve liquidity situation within the market. EQUITY MARKET REVIEW Equity momentum finally slowed down in April, with the KSE-100 benchmark index inching higher by a relatively modest 1.66% MoM. The index crossed the 14,000 mark after a span of 48 months on account of rising investor confidence and higher volume concentration. During the month, market participation in KSE-100 index climbed by 2.5% to reach 187 million shares, despite a contraction of 6.4% in the cumulative volume at the bourse. The direction of the market was mainly dictated by the Oil & Gas sector and the Automotive Industry on the back of a still resilient crude oil, depreciating JPY and drastic rise in automobile sales. After a triumphant bullish streak, Cements and Banks recorded modest performance as investors booked profits at high valuation levels and reallocated investments to relatively undervalued industries. Although the index had recorded a mid-month gain of 3.3%, political friction between the judiciary and the Prime Minister overshadowed investor sentiments, causing the market to close below the 14,000 level at month end. Even the promulgation of the Presidential Order pertaining to CGT was not able to buoy the market to anticipated levels as order content was not as generous as previously expected. On the geopolitical front, improvement in PAK-US relations manifested into resumption of external financing as the World Bank approved a USD 1.8bn loan for energy sector projects. The bank also agreed to fund the Diamer-Bhasha Dam and finally let go of disputed territorial concerns that it had previously raised. Going forward, we anticipate further external pledges and commitments from multilateral and bilateral partners as a direct consequence of resumption of relations between the US and Pakistan. MUFAP s recommended format

2 Information Type Aggressive Income Stability Rating A(f) (JCRVIS) Medium Launch Date 10th October 2005 Custodian/Trustee CDC A.F Ferguson & Co. Management Fee 1.50% Front End Load 1% Back End Load Benchmark 90% 1 Yr KIBOR and 10% average of most recent published 3 month deposit rates of top 3 scheduled Commercial Bank by deposit size Pricing Mechanism Forward NAV per Unit (PKR) Net Assets (PKR mn) (CAGR Annualized % p.a) Mar'12 FY12 to date Month-on Month Since Inception Benchmark (YTD) (Holding Period Annualized % p.a) Mar'12 FY12 to Date Month-on-Month Benchmark (YTD) Asset Allocation of Total Assets Faysal Income & Growth (FIGF) seeks to provide its investors with optimal yields through a diversified portfolio consisting of both long-term fixed instruments as well as short term money market securities. -quants Risk- Investment Committee Alpha % Standard Deviation % VaR % Sortino Information Ratio Weighted Average Maturity (Years) 1.29 Acting Manager Fixed Income Manager Fixed Income Asset Quality (% of Total Assets) TFC/SUKUK Holdings (as % of T. Assets) Government Securities PIBs 9.25 Ijara Sukuk 9.92 AA AA AA D 0.30 NR 3.23 Kohat Cement 3.23 Telecard 0.30 FIGF Vs Benchmark Non Compliance Name of Instrument Pakistan International Container Terminal Rating required Existing Rating Type of Instrument Total exposure % of Net Assets % of Total Assets % of Debt issue Not required A+ Preference shares 27,040, % 5.36% 11.19% The holds 11.19% of the issue size of the preference shares issued by Pakistan International Container Terminal Limited which is in excess of limit prescribed by the NBFC Regulation 2008 against issue size. SECP has granted approval to hold the security till 22 May FIGF continued its outstanding performance during the month of April as it yielded an impressive 21.47% which escalated YTD return to 15.87%. Your fund remained vigilant and further reduced exposure to GoP Ijara Sukuks to 10% amid unusual volatility in Ijara yields due to anticipated supply glut of Islamic instruments. Worsening fiscal imbalances amidst inadequate foreign flows kept liquidity tight in the bond market and yields remained anchored at elevated levels where 10 year PIB to DR spread crossed 125bps against its historic average of bps. Based on anticipated correction in bond yields, your fund exploited position in 10 year PIB. Additionally, management is, as always, poised to exploit opportunities in corporate instruments, FI placements and money market instruments. This investment vision shall support the high yield direction that the fund is tuned towards, enabling it to outrank its peer-group average return.

3 Information Type Stability Rating Income scheme A+(f) (JCRVIS) Low Launch Date 12th May 2007 Custodian/Trustee CDC Management Fee 1.50% Front/Back end Load A.F Ferguson & Co. Benchmark Pricing Mechanism 75% 6M KIBOR & 25% 3M PKRV Forward NAV per Unit (PKR) Net Assets(PKR mn) 2, To generate competitive returns by investing primarily in debt and fixed income instruments having investment grade credit rating. (CAGR Annualized % p.a) Apr' 12 Mar' 12 FY12 to Date Month-on Month Since Inception Benchmark (Holding Period Annualized % p.a) Apr' 12 Mar' 12 FY12 to Date Month-on-Month Benchmark (YTD) Asset Allocation of Total Assets Alpha 0.001% Risk-q quants Standard Deviation % VaR % Sortino Information Ratio Weighted Average Maturity (Years) 0.36 Asset Quality (% of Total Asse ets) T-Bills PIBs 1.86 AA AA AA FSGF Vs Benchmark Acting Manager Fixed Income Manager Fixed Income During the month under review, FSGF yielded a MTD return of 10.60% - up by 26bps over the previous month, while the fund yielded 11.18% on YTD basis. Money market yields have remained anchored at an elevated level due to anticipation of monetary tightening as the fiscal year draws to a close. Proactive strategies were used to book timely capital gains by offloading sovereign guaranteed Sukuks from the portfolio. These funds were utilized to increase exposure in T-bills to 43.17% from 32.44% a month earlier. Furthermore, nominal exposure in PIB s was taken to enhance the yield. Bank Deposits were reduced to 17.07% from 19.90% to take advantage of high yielding opportunities in the fixed income market. Placements with banks and DFIs stood at 17.46% for the month. Going forward, the fund will continue yielding attractive returns with primary focus on TDRs, LOPs and T-Bills.

4 Information Type Money Market Scheme Stability Rating AA+(f) (JCRVIS) low Launch Date 13th December 2010 Custodian/Trustee CDC Ernst & Young Ford Rhodes Sidat Hyder Management Fee 10% of Gross Earning or minimum 1.25% of Net Assets Front/Back end Load Benchmark 50% 3 month T-Bills and 50% Average 3 months deposit rate of AA rated and above banks Pricing Mechanism Backward NAV per Unit (PKR) Net Assets (PKR mn) 1, Faysal Money Market (FMMF) seeks to provide stable and competitive returns in line with the money markets exhibiting low volatility consistent with capital preservation by constructing a liquid portfolio of low risk short term investments yielding competitive returns. (CAGR Annualized % p.a) Mar'12 FY12 to Date Month-on Month Since Inception Benchmark (YTD) (Holding Period Annualized % p.a) Apr' 12 Mar' 12 FY12 to Date Month-on-Month Benchmark (YTD) Asset Allocation Total Assets Risk-quants Alpha % Standard Deviation % VaR % Sortino N/A Information Ratio Weighted Average Maturity (Days) 45 Asset Quality (% of Total Assets) Government Securities AAA AA AA Acting Manager Fixed Income FMMF Vs Benchmark Manager Fixed Income In April 2012, your fund outperformed the benchmark by a healthy 60bps, with returns enhanced by 13bps MoM. By employing active management, funds were strategically realigned to benefit from the upward sloping yield curve. Exposure in T-Bill was increased from 45% to 49%, while maturing funds were tentatively positioned in daily product accounts for further investment in government securities. Without breaching the portfolio duration limit, funds were channeled to high yielding instruments. Considering the prevailing macroeconomic conditions and liquidity constraints in the market, we anticipate FMMF to continue delivering attractive returns.

5 Information Type Stability Rating Islamic Income Scheme A+(f) (JVR-VIS) low Launch Date 14th June 2010 Custodian/Trustee CDC Management Fee 1.50% Front/Back end Load Ernst & Young Ford Rhodes Sidat Hyder Benchmark Pricing Mechanism Average 6M deposit rate of 3 Islamic Banks Forward NAV per Unit (PKR) Net Assets (PKR mn) Faysal Islamic Savings Growth (FISGF) seeks to provide maximum possible preservation of capital and a reasonable rate of return via investing in Shariah Complaint money market and debt securities having good credit quality rating and liquidity (CAGR Annualized % p.a) FY12 to Date Month-on Month Since Inception Benchmark (YTD) (Holding Period Annualized % p.a) Apr'12 Mar'12 FY12 to Date Month-on-Month Benchmark (YTD) Asset Allocation (% of Total Assets) Risk-qu uants Alpha % Standard Deviation % VaR % Sortino Information Ratio Weighted Average Maturity (Years) 0.41 Government Securities16.33 ity l Asset Quali (% of Total Assets) AAA 0.09 AA AA A 0.01 Acting Manager Fixed Income FISGF Vs Benchmark Manager Fixed Income Your fund yielded 8.75% over April, taking the YTD return to 11.29%. The fund beat its monthly and yearly benchmark return by 17bps and 256bps, respectively. In line with the medium-term strategy, exposure to Ijarah Sukuks was reduced further from 45% to 16% to avoid adverse impact from rate volatility. Going forward, the fund will mainly focus on daily Islamic bank placements, TDRs and selective Ijara Sukuks.

6 Information Risk-quants e Type Balanced Scheme Moderate Launch Date 19 April 2004 Custodian/Trustee CDC Ernst & Young Ford Rhodes Sidat Hyder Management Fee 2% Front/Back end Load 2.25% (Front end Load) Benchmark* KSE100 Index / 6M KIBOR Pricing Mechanism Forward NAV per Unit (PKR) Net Assets (mn) * weighted average of 6M KIBOR & percentage invested in equities Faysal Balanced Growth (FBGF) endeavors to provide investors with an opportunity to earn income and long-term capital appreciation by investing in a large pool of funds representing equity / non equity investments in a broad range of sectors and financial instruments Alpha % Beta Standard Deviation % VaR % Treynor Non Compliance Name of Instrument Rating required Acting Manager Fixed Income Manager Fixed Income Existing Rating Telecard A- D Pak Electron A- D Type of Instrument Value of Investment before provisioning Top 5 Sector Allocations (% of T. Assets) Top 10 holdings (% of T. Assets) Asset Quality (as % of Total Assets) Apr' 12 Mar 12 FY12 to Date Month-on Month Since Inception Benchmark (YTD) Asset Allocation of Total Assets Mar' 12 Feb 12 Households Chemicals Oil & Gas Industrial Transportation Industrial Engineering Pak Elektron Ltd-Preference Shares Pakistan int'l Container Terminal Millat Tractors Limited 9.53 Engro Corporation 7.75 Attock Petroleum Limited 6.13 Pakistan State Oil 4.62 Sui Northern Gas Pipeline Company Ltd 2.33 ICI Pakistan Limited 2.27 Lotte Pakistan PTA 0.73 Habib Metroplitan Bank Limited 0.56 AA AA AA D 6.22 Provision (If any) Value of Investment after provision % of Net Assets % of Total Assets TFC 36,770, ,732,317 15,037, Preference Shares 37,490,000-37,490, *SECP has granted extension to regularize this exposure by 30 September ** The holds 11.06% of the issue size of the preference shares issued by Pakistan international container terminal Limited which is in excess of limit prescribed by the NBFC regulation 2008 against issue size. SECP has granted approval to hold the security till 22 May Rating required Existing Rating Type of Instrument Total exposure % of Net Assets % of Total Assets % of debt issue Name of Instrument Pakistan International Container Terminal ** A- A+ Preference shares 26,720, The pro-active investment philosophy instituted for your fund has lifted it to the top of the peer group with a monthly return of 3% (annualized: 36.5%). This was achieved via selective exposure to equities, careful harvesting of capital gains and appreciation of PICT preference shares. Resultantly, equity exposure has been reduced from 48% to 35% - in line with a more conservative approach at presently high equity valuation levels. Exposure reduction was mainly focused towards the high beta Oil & Gas sector, which we believe will be the first industry to retrace gains during consolidation phase (May August). Going forward, fund management will continue to monitor domestic and international variables to assess the direction of the equity market and allocate investments accordingly.

7 Information Type Asset Allocation Scheme Moderate to High Risk Launch Date 24th July 2006 Custodian/Trustee CDC Ernst & Young Ford Rhodes Sidat Hyder Management Fee 2% Front/Back end Load 3.0% (Front end Load) Benchmark* KSE100 Index / 6M KIBOR Pricing Mechanism Forward NAV per Unit (PKR) Net Assets (mn) * weighted average of 6M KIBOR & percentage invested in equities Faysal Asset Allocation (FAAF) endeavors to provide investors with an opportunity to earn long-term capital appreciation optimizing through broad mix of asset classes encompassing equity, fixed income & money market instruments isk-quants Ri Alpha % Beta Standard Deviation % VaR % Treynor Acting Manager Fixed Income Manager Fixed Income Top 5 Sector Allocations (% of T. Assets) Top 10 Hold dings (% of T. Ass sets) Asset Quality (as % of Total Assets) Apr' 12 Mar' 12 FY12 to Date Month-on-Month Benchmark (YTD) Asset Allocation Total Assets Apr' 12 Chemicals Oil & Gas Industrial Engineering Electricity Gas water & Multiutilites Engro Corporation Limited 9.25 Millat Tractors Limited 8.20 Fatima Fertilizer Ltd 6.83 Japan Power Generation Ltd 4.07 Attock Petroleum Limited 3.92 Pakistan State Oil 3.88 National Refinery Ltd 1.42 Sui Northern Gas Pipeline Co. Ltd 1.31 Dawood Hercules Corporation Ltd 1.26 ICI Pakistan Limited 1.15 AA AA AA BBB D 5.67 Non Compliance Rating Existing Type of Value of Investment Provision (If Value of Investment % of Net % of Total Name of Instrument required Rating Instrument before provisioning any) after provision Assets Assets Maple Leaf Cement BBB D Sukuk 26,837,714 8,699,140 18,138, Maple Leaf Cement-Additional Units BBB D Sukuk 1,090,000 1,090, Trust investment Bank Limited BBB BBB- TFC 12,504,880-12,504, Your fund recorded another positive close in April 2012, generating a return of 0.66% MoM. performance was subject to opposing forces during the month, with bulls being led by CGT ordinance, external financing pledges, higher fertilizer off-take and improved automobile sales; and bears being led by political friction, deteriorating law and order situation and TFC provisioning. Profits were increasingly booked within trading-based positions, while equity composition was reduced from 60% to 45% to exercise a more prudent approach at presently high valuation levels. During the month, returns would have been relatively higher had FAAF not booked provisioning for Maple Leaf Sukuk. The issuer failed to repay the bridge financing tranche at March-end, leading to full provisioning of the instrument in April. That said, the issuer has solicited investor approval for repayment of the said tranche over nine equal installments, which shall result in provisioning reversals in each of those nine months.

8 Sortino Ratio The Sortino ratio measures the risk-adjusted return of an investment asset. It is a modification of the Sharpe ratio but penalizes only those returns falling below a user-specified target, or required rate of return, while the Sharpe ratio penalizes both upside and downside volatility equally. Trynor Ratio Treynor ratio is a measurement of the returns earned in excess of that which could have been earned on a riskless investment (i.e. Treasury Bill) (per each unit of market risk assumed). Treynor ratio (sometimes called reward-to-volatility ratio) relates excess return over the risk free rate to the additional risk taken; however systematic risk instead of total risk is used. The higher the Treynor ratio, the better the performance under analysis. Alpha (α) How much excess returns fabricate by an instrument or portfolio over the benchmark. A positive alpha is the extra return awarded to the investor for taking additional risk rather than accepting the market return. Beta (β) A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market and vice versa. Information Ratio A ratio of portfolio returns above the returns of a benchmark (usually an index) to the volatility of those returns. This ratio will identify if a manager has beaten the benchmark by a lot in a few months or a little every month. The higher the IR the more consistent a manager is. Standard deviation It shows how much variation exists from the average (mean, or expected value). A low standard deviation indicates that the data points tend to be very close to the mean and vice versa. Value at Risk (VaR) VaR refers to the particular amount of money, the maximum amount we are likely to loss over some period, at some specific confidence level. For example if a portfolio of stocks has a VaR of 2% at the confidence level of 95% of Rs. 1 million, there is 5% probability that portfolio loss could exceed Rs. 20,000 in a day. *See clause Number 6.1 offering document for details Disclaimer: This publication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any fund. All investments in mutual funds are subject to market risks. The NAV based prices of units and any dividends/returns thereon are dependant on forces and factors affecting the capital markets. These may go up or down based on market conditions. Past performance is not necessarily indicative of future results