Islamic Savings Growth Fund. Financial Statements for the Quarter Ended September 30, 2017

Transcription

1 Islamic Savings Growth Fund Financial Statements for the Quarter Ended September 30, 2017

2 Faysal Islamic Savings Growth Fund

3 Fund Information Mission Statement Report of the Directors of the Management Company Condensed Interim Statement of Assets and Liabilities Condensed Interim Income Statement Condensed Interim Statement of Comprehensive Income Condensed Interim Cash Flow Statement Condensed Interim Statement of Movement in Unit Holders Fund Notes to the Condensed Interim Financial Information

4 4 Faysal Islamic Saving Growth Fund Faysal Asset Management Limited Mr. Salman Ahmed Usmani, Chairman Mr. Osman Khan, Director Syed Ibad-Ur-Rehman Chishti, Director Mr. Mohammad Zahid Ahmed, Director Mr. Farooq Hassan, Director Mr. Razi-Ur-Rahman Khan, Director/CEO Chief Financial Officer and Company Secretary of the Management Company Mr. Naved Hanif Mr. Osman Khan, Chairman Syed Ibad-Ur-Rehman Chisti, Member Mr. Farooq Hassan, Member HR Comittee Mr. Osman Khan, Chairman Syed Ibad-Ur-Rehman Chishti, Member Mr. Razi-Ur-Rahman Khan, Member Central Depository Company of Pakistan Limited, National Bank of Pakistan - Islamic Banking Dubai Islamic Bank Pakistan Limited Al-Baraka Bank Limited UBL Ameen - Islamic Banking Bank Islami Pakistan Limited Faysal Bank Limited - Islamic Banking Deloitte Yousuf Adil, Chartered Accountants

5 Faysal Islamic Saving Growth Fund 5

6 6 Faysal Islamic Saving Growth Fund The Board of Directors of the Faysal Asset Management Limited, the Management Company of the Faysal Islamic Saving Growth Fund (FISGF), is pleased to present the un-audited condensed interim financial information of FISGF for the quarter ended September 30, FINANCIAL HIGHLIGHTS Quarter Ended September Total income Operating expenses Net income before tax Element of income Taxation Net income after tax NAV per unit (Rs. per unit) (6.768) (3.979) ECONOMIC REVIEW: The China-Pakistan Economic Corridor (CPEC) which is still work-in-progress has already started to help Pakistan climb several rungs on the ladder of global competitiveness and economic progress. Pakistan is a resource-rich and labor abundant economy, but relatively poor infrastructure, acute energy shortfall, low Foreign Direct Investment (FDI) and narrow manufacturing base have created barriers for global integration and industrialization in Pakistan. These bottlenecks have restrained productivity over the years. In such circumstances, the investment of $59 billion under the project of China-Pakistan Economic Corridor (CPEC) is a blessing in disguise that is supposed to revive the economy of Pakistan. When market forces fail to bring convergence in the economy, government intervention to overcome the situation becomes necessary. For Pakistan, this vital role of savior is being played by CPEC, which aims to fulfill the investment saving gap, improve the industrial base and shape the manufacturing sector. Moreover, the LSM Index inclined by 13% YoY during Jul 17, which was the highest since Mar 16. Pakistan s burgeoning youth and their freewheeling attitude toward rising incomes have turned the nation into the world s fastest growing retail market. Bloomberg predicted the market to expand 8.2% per annum through as disposable income has doubled since 2010, according to research group Euromonitor International. The size of the middle class is estimated to surpass that of the U.K. and Italy in the forecast period, it said. Pakistan s improving security environment, economic expansion at near 5% and cheap consumer prices are driving shoppers to spend up big. Almost two-thirds of the nation s million people are aged under 30, according to the Jinnah Institute, an Islamabad-based think tank. Not only that, Pakistan s ranking in terms of Economic Freedom of the World 2017 report has improved by 10 notches and it stood at 127th position out of total 159 countries,

7 Faysal Islamic Saving Growth Fund 7 where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives. Average CPI based inflation during the first quarter of the current fiscal year (July-September) witnessed increase of 3.39% compared to July-September ( ). Furthermore, Economic indicators CAD receded by 73% MoM to USD 550mn in Aug 2017, thus reducing the investors concern on sustainability of Balance of Payments. Moreover, the LSM Index inclined by 13% YoY during Jul 17, which was the highest since Mar 16. FDI escalated to $234 million in Aug 2017, while foreign exchange reserves of the country stood at $ billion. Of course, Pakistan s major problem is growing public debt, as debt services loan installments and interest would consume about 33% of federal revenue. Unprecedented growing public debt, on one hand, limits the capacity to build a strong defensive capability, and on the other hand, limits fiscal space to invest in human development and infrastructure. Pakistan faces challenges of a growing debt burden, fiscal deficit, trade deficit, and current account deficit, which are not of any less importance than the threats to internal and external security. MONEY MARKET REVIEW SBP announced 2 MPS Monetary Policy Statements during 01QFY18 and in both MPS announcements SBP maintained status quo policy rate at 5.75% given the continuously expanding fiscal deficit, rapidly declining exports, decline in remittance inflows and improvement in inflation outlook on the back of improved prices of perishables. During the period Jul 17 Sep 17 money market continued to remain illiquid and SBP conducted eighteen OMO Injections where the total injected amount was PKR 17,619bn and the total participation amount was PKR 18,400bn. The weighted average rate of the injected amount during the said period was 5.77%. During the period under discussion No OMO - Mop up were conducted. SBP conducted 07 T-bill auctions in the 01QFY18 where the total accepted amount was PKR 4,294.28bn where the total stipulated target of SBP was PKR 3,900bn and the cuts offs remained stable over the said period as in last auction cut-offs were; 3M %, 6M % and 12M %. Similarly, during the 01QFY18, one PIB auctions was conducted where SBP realized bids worth PKR 52.41bn against total target of PKR 100bn. The major focus was 3yr followed by 5yr and 10yr by market participants. Moreover, this suit conveyed various investors to foresee SBP s reluctance to accumulate at higher levels, given excess amount borrowed from T-bills. This mindset was clearly witnessed in subsequent two auctions, as both were rejected. Central Directorate of National Savings (CDNS) has proposed launching dollar denominated bond for attracting investment from millions of overseas Pakistanis to generate $500 to $700 million during the current fiscal year to lure small investors working overseas and possessing meager savings. The government is planning to unveil a scheme to attract remittances from

8 8 Faysal Islamic Saving Growth Fund abroad. Pakistan s nationalized and commercial banks would be incentivized to establish joint ventures with branches of international banks at selected destinations to lure Pakistanis living abroad to send money through official banking channels. The government also intends to launch Sukuk bond to attract $1 billion in first half of November this year. Keeping in view the growing deficit, different commercial banks are seeking the launch of Sukuk or Euro bond. While some international banks advising the government to launch the Euro bond instead of Sukuk due to his clientage base in EU and the US. FUND PERFORMANCE Faysal Islamic Saving Growth Fund generated return of 3.56% during the 1QFY18. By the end of 1QFY18, your fund maintained investments in cash (49.08%) and TFCs / Sukuks (32.06%). Going forward, your fund would keep evaluating the macroeconomic landscape to optimally balance the portfolio which would ensure superior returns in the Islamic Income category. FUND RANKING JCR-VIS Credit Rating Co. Limited has awarded the fund stability rating of A(f) for Faysal Islamic Savings Growth Fund (FISGF). This rating denotes moderate degree of stability in Net Assets Value. ACKNOWLEDGEMENT The Board of Directors of the Management Company thanks the unit holders for their confidence in the Management, the Securities and Exchange Commission of Pakistan for its valuable support, assistance and guidance. The Board also thanks the employees of the Management Company and the Trustee for their dedication and hard work. For and on behalf of the Board Karachi: October 19, 2017 Razi-Ur-Rahman Khan Chief Executive Officer

9 Faysal Islamic Saving Growth Fund 9 Condensed Interim Statement of Assets and Liabilities As at September 30, 2017 Note September 30, June 30, (Un-audited) (Audited) (Rupees) Assets Bank balances 5 614,593, ,989,377 Investments 6 621,523, ,216,162 Deposits and other receivables 15,434,998 13,693,399 Advance tax 805,205 - Total assets 1,252,357,484 1,304,898,938 Liabilities Payable to the Management Company 2,437,004 2,240,443 Remuneration payable to the Trustee 176, ,822 Accrued and other liabilities 7 8,756,239 9,215,290 Payable against redemption of units - 24,994,518 Dividend payable - 14,527,632 Total liabilities 11,369,868 51,135,705 Net assets 1,240,987,616 1,253,763,233 Unit holders fund (as per the statement attached) 1,240,987,616 1,253,763,233 Contingencies and commitments (Number of units) Number of units in issue 11,985,654 12,217,867 Net asset value per unit The annexed notes from 1 to 13 form an integral part of this condensed interim financial information. For Faysal Asset Management Limited (Management company) (Rupees) Chief Financial Officer Chief Executive Officer Director

10 10 Faysal Islamic Saving Growth Fund Condensed Interim Income Statement For the Quarter Ended September 30, 2017 (Un-Audited) Income Note For the Quarter ended September 30, (Rupees) Profit earned on government securities and sukuk certificates classified as 'at fair value through profit or loss' - held-for-trading 7,712,328 6,614,007 Profit earned on commercial paper - classified as 'held to maturity' - - Return on bank balances and term deposit receipts 10,259,496 5,746,746 Return on certificate of musharika - classified as 'held to maturity' 1,705,128 - Net (loss) / gain on investments: - Net capital gain on sale of investments classified as: -'at fair value through profit or loss' - held-for-trading 744, ,330 - Net unrealised (loss) / gain on revaluation of investments classified as -'at fair value through profit or loss' - held-for-trading 6.5 (2,465,418) 3,300,342 (1,721,269) 4,247,672 Total income 17,955,683 16,608,425 Expenses Remuneration of the Management Company 4,805,213 2,638,205 Reimbursement of expenses to the Management Company - 175,880 Sales tax on management fee 624, ,967 Remuneration of the Trustee 493, ,011 Sales tax on trustee fee 64,112 38,871 Brokerage 14,645 24,511 Bank charges 13,407 19,195 Auditors' remuneration 126, ,896 SECP annual fee 238, ,910 Fees and subscriptions 69,368 77,607 Settlement charges, federal excise duty and capital value tax 26,930 61,135 Printing and other expenses 63,204 63,204 Provision of Sindh Worker's Welfare Fund ,323 - Total expenses 6,767,846 3,979,392 Net income from operating activities 11,187,837 12,629,033 Element of income and capital gains included in prices of units sold less those in units redeemed - net - 804,421 Net income for the period before taxation 11,187,837 13,433,454 Taxation Net income for the period after taxation 11,187,837 13,433,454 Allocation of net income for the period Income already paid on units redeemed (588,775) - 10,599,062 13,433,454 Accounting income available for distribution - Relating to capital gains 744,149 4,247,672 - Excluding capital gains 9,854,913 9,185,782 10,599,062 13,433,454 The annexed notes from 1 to 13 form an integral part of this condensed interim financial information. For Faysal Asset Management Limited (Management company) Chief Financial Officer Chief Executive Officer Director

11 Faysal Islamic Saving Growth Fund 11 Condensed Interim Statement of Comprehensive Income For the Quarter Ended September 30, 2017 (Un-Audited) For the Quarter ended September 30, (Rupees) Accounting income available for distribution 10,599,062 13,433,454 Other comprehensive income for the period - - Total comprehensive income for the period 10,599,062 13,433,454 The annexed notes from 1 to 13 form an integral part of this condensed interim financial information. For Faysal Asset Management Limited (Management company) Chief Financial Officer Chief Executive Officer Director

12 12 Faysal Islamic Saving Growth Fund Condensed Interim Cash Flow Statement For the Quarter Ended September 30, 2017 (Un-Audited) CASH FLOWS FROM OPERATING ACTIVITIES Note For the Quarter ended September 30, (Rupees) Net income for the period before taxation 11,187,837 13,433,454 Adjustments for non-cash and other items Profit earned on government securities and sukuk certificates (7,712,328) (6,614,007) Return on bank balances and term deposit receipts (10,259,496) (5,746,746) Return on certificate of musharika (1,705,128) - - Net capital gain on sale of investments classified as: -'at fair value through profit or loss' - held-for-trading (744,149) (947,330) - Net unrealised loss / (gain) on revaluation of investments classified as -'at fair value through profit or loss' - held-for-trading 2,465,418 (3,300,342) Element of income and capital gains included in prices of units sold less those in units redeemed - net - (804,421) Adjustment of dividend for the period ended June 24, ,461 Provision for Sindh Worker's Welfare Fund 228,323 - (6,539,523) (3,308,931) Increase in assets Deposits and other receivables (135,298) (41,787) Increase/ (decrease) in liabilities Payable to the Management Company 196, ,826 Remuneration payable to the Trustee 18,803 2,210 Accrued and other liabilities (687,375) (975,133) (472,011) (778,097) (7,146,832) (4,128,815) Proceeds from sale / redemption of investments 63,971,307 57,914,867 Payment made against purchase of investments - (23,980,450) Profit received on government securities and sukuk certificates 9,579,476 - Return received on bank balances and term deposit receipts 7,871,578 13,370,945 Withholding taxes paid (185,607) (349,890) Net cash generated from operating activities 74,089,922 42,826,657 CASH FLOWS FROM FINANCING ACTIVITIES Amounts received against issue of units 135,501, ,223,109 Payments made against redemption of units (184,459,782) (202,766,691) Dividend paid (14,527,632) - Net cash (used in) / generated from financing activities (63,485,604) 140,456,418 Net increase in cash and cash equivalents during the period 10,604, ,283,075 Cash and cash equivalents at the beginning of the period 603,989, ,947,795 Cash and cash equivalents at the end of the period 5 614,593, ,230,870 The annexed notes from 1 to 13 form an integral part of this condensed interim financial information. For Faysal Asset Management Limited (Management company) Chief Financial Officer Chief Executive Officer Director

13 Faysal Islamic Saving Growth Fund 13 Condensed Interim Statement of Movement in Unit Holders Fund For the Quarter Ended September 30, 2017 (Un-Audited) For the Quarter ended September 30, (Rupees) Net asset value per unit at the beginning of the period Net asset value per unit at the end of the period Net assets at the beginning of the period 1,253,763, ,147,051 Amounts received on issue of units during the period* 135,501, ,138,434 Amounts paid on redemption of units during the period** (159,465,264) (140,766,691) (23,963,454) 122,371,743 Element of income and capital gains included in prices of units sold less those in units redeemed - net - (804,421) Income already paid on units redeemed 588,775 - Adjustment for distribution for the period ended June 24, Rs per unit declared for distribution on June 27, ,461 Total comprehensive income for the period 10,599,062 13,433,454 Net income for the period less distribution 10,599,062 14,103,915 Net assets at the end of the period 1,240,987, ,818,288 Distribution for the period Undistributed income brought forward - Realised 16,252,312 7,453,984 - Unrealised 5,994,584 6,263,129 22,246,896 13,717,113 Accounting income available for distribution - Relating to capital gains 744,149 4,247,672 - Excluding capital gains 9,854,913 9,185,782 10,599,062 13,433,454 Adjustment for distribution for the period ended June 24, Rs per unit declared for distribution on June 27, ,461 Undistributed income carried forward 32,845,958 26,480,106 - Realised 29,316,792 16,800,148 - Unrealised 3,529,166 9,679,958 32,845,958 26,480,106 * Number of units issued (including Nil bonus units issued (Number of units) during the period ended September 30, 2017 and September 30, 2016) 1,315,989 2,556,484 ** Number of units redeemed 1,548,202 1,363,712 The annexed notes from 1 to 13 form an integral part of this condensed interim financial information. For Faysal Asset Management Limited (Management company) Chief Financial Officer Chief Executive Officer Director

14 14 Faysal Islamic Saving Growth Fund Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) 1. LEGAL STATUS AND NATURE OF BUSINESS Faysal Islamic Savings Growth Fund (the Fund) has been established under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (the NBFC Rules) and has been authorised as a unit trust scheme by the Securities and Exchange Commission of Pakistan (SECP) on June 04, It has been constituted under a Trust Deed, dated April 22, 2009, between Faysal Asset Management Limited (the Management Company), a company incorporated under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) and Central Depository Company of Pakistan Limited (CDC) as the Trustee, also incorporated under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). The Fund is a shariah compliant open ended Islamic income fund and offers units for public subscription on a continuous basis. The units are transferable and can also be redeemed by surrendering to the Fund. The units are listed on the Pakistan Stock Exchange Limited. The Fund was launched on June 14, The principal activity of the Fund is to invest in shariah compliant money market instruments and debt securities having good credit rating and liquidity. The Fund is categorised as a "Islamic Income Scheme" as per the Circular 07 of 2009 issued by SECP. The JCR - VIS Credit Rating Company Limited (JCR - VIS) has assigned a "A(f)" stability rating to Faysal Islamic Saving Growth Fund as of April 28, JCR - VIS has awarded an "AM3+" asset manager rating to the Management Company as of October 12, STATEMENT OF COMPLIANCE 2.1 This condensed interim financial information of the Fund has been prepared in accordance with the requirements of the International Accounting Standard 34: Interim Financial Reporting the requirements of the Trust Deed, the NBFC Rules, the Non Banking Finance Companies and Notified Entities Regulation, 2008 (the NBFC Regulations), the Companies Act, 2017 and directives issued by the SECP. In case requirements differ, the requirements of the Trust Deed, the NBFC Rules, the NBFC Regulations the Companies Act, 2017 or the directives issued by the SECP shall prevail. 2.2 The Companies Ordinance, 1984 has been repealed after the enactment of the Companies Act, 2017 (the Act) on May 30, However, the SECP vide its Circular No.23 dated October 4, 2017 allowed Companies whose financial year closes on or before December 31, 2017 to prepare the financial statements in accordance with the provisions of the repealed Companies Ordinance, The Act does not impact the condensed interim financial information of the Fund for the period ended September 30, BASIS OF MEASUREMENT 3.1 This condensed interim financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the annual financial statements of the Fund for the year ended June 30, This condensed interim financial information are presented in Pak rupees, which is the Fund's functional and presentation currency.

15 Faysal Islamic Saving Growth Fund 15 Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Except for change in note 4.1, the accounting policies and methods of computation adopted in the preparation of this condensed interim financial information and the significant judgements made by the management in applying the accounting policies and key sources of estimation uncertainity are the same as those applied in the preparation of the financial statements as at and for the year ended June 30, The Fund s financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended June 30, Change in accounting policy - element of income / (loss) and capital gains / (losses) included in prices of units issued less those in units redeemed The SECP vide its statutory notification (S.R.O) No.756(I) / 2017 dated August 3, 2017, has introduced certain amendments in Schedule V of the NBFC Regulations, resulting in change in the treatment of element of income / (loss) and capital gains / (losses) included in prices of units issued less those in units redeemed, earlier the element was recognized in the income statement to the extent that it is represented by income earned during the year and unrealized appreciation / (diminution) arising during the year on available for sale securities was included in the Distribution Statement. As per the aforesaid SRO "element of income is a transaction of capital nature and receipt and payment of element of income is taken to the unit holder's fund." As a result the Fund has made certain changes in this condensed interim financial information as mentioned in note BANK BALANCES Note September 30, June 30, (Un-audited) (Audited) (Rupees) Cash at banks - PLS saving accounts ,593, ,989, These carry mark-up ranging between 3.75% to 5.60% (June 30, 2017: 3.75% to 5.60%) per annum and include balance of Rs million (June 30, 2017: Rs million) held with Faysal Bank Limited, a related party. 6. INVESTMENTS Note September 30, June 30, (Un-audited) (Audited) (Rupees) At fair value through profit or loss - held-for-trading Listed sukuk certificates ,523, ,216,162 Held to maturity Certificates of Musharika ,000, ,000,000 Term Deposit Receipts ,000, ,000,000 Unlisted sukuk certificates ,000, ,000, ,523, ,216,162

16 16 Faysal Islamic Saving Growth Fund Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) 6.1 Listed sukuk certificates - at fair value through profit or loss - held-for-trading Number of certificates Balance as at September 30, 2017 Carrying value as Carrying Value as Rate of return Purchased As at Unrealised Name of investee company As at July Sold during Maturity percentage of total percentage of net per annum during the September 30, Carrying value Market value gain / (loss) on 01, 2017 the period investments assets period 2017 revaluation Electricity / energy Rupees % % K-Electric Limited - Azam ( ) (5 years) 8.91% 14, ,800 74,000,000 76,212,524 2,212,524 March, % 6.14% Fertilizer Engro Corporation Limited ( ) (5 years) 13.50% 2, ,408 13,359,650 13,815, ,250 July, % 1.11% Engro Fertilizer Limited ( ) (05 Years) 7.89% 12, ,000 42,997,763 43,275, ,399 July, % 3.49% Financial Meezan Bank Limited ( ) 6.67% ,719,839 41,720, Aug, % 3.36% Cable and electrical goods TPL Trakker Limited - Shirkatul Milk Sukuk ( ) 9.47% ,917,168 51,500, ,832 April % 4.15% September 30, ,994, ,523,586 3,529,166 June 30, ,221, ,216,162 5,994, Significant terms and conditions of Sukuk certificates are as follows: Face value per certificate Mark-up rate Secured / Name of investee company Number of Certificates held Maturity Rating (Rupees) (per annum) Unsecured K-Electric Limited - Azam ( ) (5 years) 14,800 5, % + 3 Months KIBOR March, 2019 Secured AA Engro Corporation Limited ( ) (5 years) 2,408 5, % July, 2019 Secured AA+ Engro Fertilizer Limited ( ) (05 Years) 10,500 4, % + 6 Months KIBOR July, 2019 Secured AA- Meezan Bank Limited ( ) 40 1,000, % + 6 Months KIBOR Aug, 2026 Secured AA- TPL Trakker Limited - Shirkatul Milk Sukuk ( ) 50 1,000,000 3% + 1 Year KIBOR April Secured A+ 6.2 Certificates of Musharika Face value Face Value as Face Value as Rate of Purchased Matured/Sold As at percentage of Name of investee company As at July 01, Carrying value Maturity Rating percentage of Return per during the during the September 30, total 2017 net assets annum period period 2017 investments Rupees Orix Leasing Modaraba 6.15% 110,000, ,000, ,000, Nov, % 8.86%

17 Faysal Islamic Saving Growth Fund 17 Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) 6.3 Term deposit receipts Face value Face Value as Face Value as Rate of Purchased Matured/Sold As at percentage of Name of investee company As at July 01, Carrying value Maturity Rating percentage of Return per during the during the September 30, total 2017 net assets annum period period 2017 investments (Rupees) Dubai Islamic Bank Ltd 6.00% 110,000, ,000, ,000, Jun, % 8.86% 6.4 Unlisted sukuk certificates Number of certificates Balance as at September 30, 2017 Carrying value as Carrying Value as Rate of return Purchased Transferred/So As at Unrealised Name of investee company As at July Maturity percentage of total percentage of net per annum during the ld during the September 30, Carrying value Market value gain / (loss) on 01, 2017 investments assets period period 2017 revaluation (Rupees) Oil and gas BYCO Oil Pakistan Limited 7.20% 1, , ,000, ,000, Jan-22 28% 14% 1, , ,000, ,000, Net unrealised gain on revaluation of investments - September 30, June 30, 'at fair value through profit or loss' (Un-audited) (Audited) (Rupees) Market value of investments 226,523, ,216,162 Less: Carrying value (222,994,420) (286,221,578) 3,529,166 5,994,584 Net unrealised gain on investments at the beginning of the period (5,994,584) (6,263,129) Realised on disposal during the period - 2,947,263 (5,994,584) (3,315,866) (2,465,418) 2,678, ACCRUED AND OTHER LIABILITIES SECP annual fee payable , ,868 Accrued liabilities 1,285,453 1,427,113 Provision for Sindh Worker's Welfare Fund 7.2 1,960,764 1,732,440 Provision for indirect taxes and duties 7.3 5,271,869 5,271,869 8,756,239 9,215,290

18 18 Faysal Islamic Saving Growth Fund Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) 7.1 This represents annual fee payable to the SECP in accordance with the NBFC Regulations, whereby the Fund is required to pay annually an amount equal to 0.075% (June 30, 2016: 0.075%) per annum of the daily net asset value of the Fund. 7.2 The Finance Act, 2008 had introduced an amendment to the Workers' Welfare Fund Ordinance, 1971 (WWF Ordinance) as a result of which it was construed that all Collective Investment Schemes (CISs) / mutual funds whose income exceeded Rs 0.5 million in a tax year were brought within the scope of the WWF Ordinance, thus rendering them liable to pay contribution to WWF at the rate of two percent of their accounting or taxable income, whichever was higher. In light of this, the Mutual Funds Association of Pakistan (MUFAP) filed a constitutional petition in the Honourable Sindh High Court (SHC) challenging the applicability of WWF on CISs which is pending adjudication. Similar cases were disposed off by the Peshawar and the Lahore High Courts in which these amendments were declared unlawful and unconstitutional. However, these decisions were challenged in the Supreme Court of Pakistan. Subsequently, the Finance Act, 2015 introduced an amendment under which CISs / mutual funds have been excluded from the definition of industrial establishment subject to WWF under the WWF Ordinance. Consequently, mutual funds are not subject to this levy after the introduction of this amendment which is applicable from tax year Accordingly, no further provision in respect of WWF was made with effect from July 1, On November 10, 2016 the Supreme Court of Pakistan (SCP) has passed a judgment declaring the amendments made in the Finance Acts 2006 and 2008 pertaining to WWF as illegal citing that WWF was not in the nature of tax and could, therefore, not have been introduced through money bills. Accordingly, the aforesaid amendments have been struck down by the SCP. The Federal Board of Revenue has filed a petition in the SCP against the said judgment, which is pending for hearing. While the petitions filed by the CISs on the matter are still pending before the SHC, the Mutual Funds Association of Pakistan (MUFAP) (collectively on behalf of the asset management companies and their CISs) has taken legal and tax opinions on the impact of the SCP judgement on the CISs petition before the SHC. Both legal and tax advisors consulted were of the view that the judgment has removed the very basis on which the demands were raised against the CISs. Therefore, there was no longer any liability against the CISs under the WWF Ordinance and that all cases pending in the SHC or lower appellate forums will now be disposed of in light of the earlier judgement of the SCP. Furthermore, as a consequence of the 18th amendment to the Constitution of Pakistan, in May 2015 the Sindh Workers Welfare Fund Act, 2014 (SWWF Act) had been passed by the government of Sindh as a result of which every industrial establishment located in the Province of Sindh, the total income of which in any accounting year is not less than Rs 0.50 million, is required to pay Sindh Workers Welfare Fund (SWWF) in respect of that year a sum equal to two percent of such income. The matter was taken up by the MUFAP with the Sindh Revenue Board (SRB) collectively on behalf of various asset management companies (including the Management Company of the Fund) whereby it was contested that mutual funds should be excluded from the ambit of the SWWF Act as these were not industrial establishments but were pass through investment vehicles and did not employ workers. The SRB held that mutual funds were included in the definition of financial institutions as per the Financial Institution (Recovery of Finances) Ordinance, 2001 and were, hence, required to register and pay SWWF under the SWWF Act. Thereafter, MUFAP has taken up the matter with the Sindh Finance Ministry to have mutual funds excluded from the applicability of SWWF. In view of the above developments regarding the applicability of Federal and Sindh Worker's Welfare Fund on Mutual Funds and considering the legal opinion obtained on these matters, MUFAP has recommended the following to all its members on January 12, 2017: - the based on legal opinion, the entire provision against WWF held by the CISs till June 30, 2015, to be reversed on 12 January 2017; and - the provision in respect of SWWF should be made on a prudent basis with effect from the date of enactment of the SWWF Act, 2014 (i.e. starting from May 21, 2015) on January 12, The above decisions were communicated to the SECP and the Pakistan Stock Exchange Limited on January 12, The SECP vide its letter dated February 1, 2017 has advised MUFAP that the adjustments relating to the above should be prospective and supported by adequate disclosures in the financial statements of the CISs. Accordingly, necessary adjustments in this respect have been recorded in the books of the Funds on January 12, 2017.

19 Faysal Islamic Saving Growth Fund 19 Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) Consequent to the above, the Fund on January 12, 2017 reversed an amount of Rs 4.35 million in respect provision of WWF, this has resulted in an increase in NAV per unit of Re on January 12, Also the Fund has made a provision of Rs 1.04 million in respect of SWWF. Had the provision for SWWF not been recorded in the condensed interim financial information of the Fund, the net asset value of the Fund as at September 30, 2017 would have been higher by Re.0.16 per unit. 7.3 There is no change in the status of the appeal filed by the Federal Board of Revenue in the Supreme Court of Pakistan in respect of levy of Federal Excise Duty at the rate of 16% on the services of the Management Company, as reported in note 14.3 to the annual financial statements of the Fund for the year ended June 30, Had the provision not been made, the net assets value per unit of the Fund would have been higher by Rs.0.44 per unit (June 30, 2017: Rs.0.43 per unit). 8. CONTINGENCIES AND COMMITMENTS There were no contingencies and commitments as at September 30, 2017 and June 30, 2017 except as disclosed in relevant notes to this condensed interim financial information. 9. TAXATION 9.1 The income of the fund is exempt from income tax under Clause (99) of Part 1 of the Second Schedule to the Income Tax Ordinance, 2001 (Clause 99) and regulation 63 of the Non Banking Finance Companies and Notified Entities Regulations, 2008 subject to the condition that not less than 90 percent of the accounting income for the year, as reduced by capital gains, whether realized or unrealized, is distributed amongst the unit holders. The Fund is also exempt from the provisions of section 113 (minimum tax) under clause II A of Part IV to the Second Schedule of the Income Tax Ordinance, Since the management intends to distribute the income earned by the Fund during the period to the unit holders in cash in the manner as explained above, accordingly, no provision for taxation has been made in this condensed interim financial information for the period ended September 30, TRANSACTIONS WITH CONNECTED PERSONS AND RELATED PARTIES 10.1 Connected persons and related parties include Faysal Asset Management Limited being the Management Company, Central Depository Company of Pakistan Limited being the Trustee, other collective investment schemes managed by the Management Company, Faysal Asset Management Limited - Staff Provident Fund, Faysal Asset Management Limited - Staff Gratuity Fund, Faysal Bank Limited, Faysal Bank Limited - Staff Provident Fund, Faysal Bank Limited - Staff Gratuity Fund and other entities under common management and / or directorship and the directors and officers of the Management Company and the Trustee, key management personnel, other associated undertakings and unit holders holding more than 10% units of the Fund at period end The transactions with connected persons are in the normal course of business at contracted rates The details of transactions carried out by the Fund with connected persons / related parties and balances with them at period end are as follows: Transactions during the period Quarter ended September 30, (Un-audited) (Rupees) Faysal Asset Management Limited (Management Company) Remuneration of Management Company 4,805,213 2,638,205 Sales tax on management fee 624, ,967 Reimbursement of expenses payable to Management Company - 175,880 Faysal Bank Limited (Group company / Associated Company) Income on deposits 26,642 31,921 Bank charges 2,217 5,452

20 20 Faysal Islamic Saving Growth Fund Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) Central Depository Company of Pakistan Limited - (Trustee of the Fund) Quarter ended September 30, (Un-audited) (Rupees) Remuneration of Trustee 493, ,011 Sales tax on Trustee fee 64,112 38,871 Settlement charges 7,232 1,135 Directors and Key Management Personnel of the Management Company Redemption of 1,174 units (2016: Nil) 120,605 - Outstanding balances September 30, June 30, (Un-audited) (Audited) (Rupees) Faysal Asset Management Limited (Management Company) Remuneration payable to the management Company 1,525,088 1,351,173 Sales tax on management fee payable 198, ,651 FED on management fee payable 5,271,869 5,271,869 Reimbursement of expenses payable to the Management 713, ,619 Faysal Bank Limited (Group company / Associated Company) Units in issue 1,818,788 (June 2017: 1,818,788 units) 188,317, ,643,982 Balance in PLS account 3,312,861 3,830,000 Profit receivable on bank deposit 26,138 - Central Depository Company of Pakistan Limited - (Trustee of the Fund) Remuneration payable to the Trustee 156,305 1,659,488 Sales tax on trustee fee payable 20, ,733 Security deposit 100, ,000 Directors and Key Management Personnel of the Management Company Units in issue Nil units (June 2017: 1,174 units) - 120,476 Units holders having 10% or more units FBL Staff Provident Fund Units in issue 1,985,681 units (June 2017: 1,985,681 units) 205,597, ,770, FAIR VALUE OF FINANCIAL INSTRUMENTS IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements and disclosures about fair value measurement where such measurements arerequired as permitted by other IFRSs. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date (i.e. an exit price). Financial assets which are tradable in an open market are revalued at the market prices prevailing on the date of statement of assets and liabilities. The estimated fairvalue of all other financial assets and financial liabilities is considered not significantly different from book value. The following table shows financial instruments recognized at fair value, analyzed between those whose fair value is based on: Level 1: quoted prices in active markets for identical assets; Level 2: those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derivedfrom prices); and Level 3: those with inputs for the asset or liability that are not based on observable market data (unobservable inputs).

21 Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) As at September 30, 2017, the Fund held the following financial instruments which were measured at fair value: Deposits and other receivables September 30, 2017 Carrying amount Fair value Cash and cash equivalents Total Investments (Rupees) Level 1 Level 2 Level 3 Total (Rupees) Financial assets measured at fair value Investments classified as 'At fair value hrough profit or loss' held-for-trading Sukuk certificates 226,523, ,523, ,523, ,523,586 Financial assets not measured at fair value Bank balances ,593, ,593, Deposits and other receivables - 15,299,699-15,299, Certificate of Musharika 110,000, ,000, Term deposit receipt 110,000, ,000, Unlisted Sukkuk 175,000, ,000, ,523,586 15,299, ,593,695 1,251,416, ,523, ,523,586 Deposits and other receivables June 30, 2017 Carrying amount Fair value Cash and cash equivalents Total Investments Level 1 Level 2 Level 3 Total (Rupees) (Rupees) Financial assets measured at fair value Investments classified as 'At fair value hrough profit or loss' held-for-trading Sukuk certificates 292,216, ,216, ,216, ,216,162 Financial assets not measured at fair value Bank balances ,989, ,989, ,989,377 Deposits and other receivables - 13,073,801-13,073, Certificate of Musharika 110,000, ,000, Term deposit receipt 110,000, ,000, Unlisted Sukkuk 175,000, ,000, ,216,162 13,073, ,989,377 1,304,279, ,216, ,205,539 t t - - Faysal Islamic Saving Growth Fund 21

22 22 Faysal Islamic Saving Growth Fund Notes to the Condensed Interim Financial Information For the Quarter Ended September 30, 2017 (Un-Audited) September 30, 2017 Fair value Carrying Amount Level 1 Level 2 Level 3 Total (Rupees) Financial liabilities not measured at fair value Payable to the Management Company 2,238, Remuneration payable to the Trustee 156, Accrued and other liabilities 1,285, ,680, June 30, 2017 Fair value Carrying Amount Level 1 Level 2 Level 3 Total (Rupees) Financial liabilities not measured at fair value Payable to the Management Company 2,064, Remuneration payable to the Trustee 139, Accrued and other liabilities 1,427, Payable against redemption of units 24,994, Dividend payable 14,527, ,153, GENERAL 12.1 Expense ratio As per Directive 23 of 2016 dated July 20, 2016 issued by SECP, the total expense ratio of the Fund is 2.1% as on September 30, 2017 which includes 0.36% representing Government Levies, Provision for SWWF and SECP fee The SECP vide its statutory notification (S.R.O) No.756(I) / 2017 dated August 3, 2017, has introduced certain amendments in Schedule V of the NBFC Regulations, resulting in certain changes in the presentation of Income Statement and Statement of Movement in Reserves or Unit Holders' Fund, and deletion of Distribution Statement. The same is applicable on the financial statements beginning on or after July 1, Accordingly, the financial and other impacts due to the applicability of the amended NBFC Regulations, 2008, if any, have been incorporated from this financial period. Had the above mentioned changes not been made in the condensed interim financial information the net income for the period would have been lower by Rs million Figures are rounded off to the nearest Rupee. 13. DATE OF AUTHORISATION FOR ISSUE This condensed interim financial information was authorised for issue on October 19, 2017 by the Board of Directors of the Management Company. For Faysal Asset Management Limited (Management company) Chief Financial Officer Chief Executive Officer Director

23 Faysal Islamic Saving Growth Fund 23

24 24 Faysal Islamic Saving Growth Fund

25 Faysal Islamic Saving Growth Fund 25

26 26 Faysal Islamic Saving Growth Fund (3.979) Quarter Ended September (6.768)

27

28