JS CAPITAL PROTECTED FUND V (Capital Protected Scheme) OFFERING DOCUMENT

Transcription

1 MANAGEMENT COMPANY JS Investments Limited Registered Office: 7 th Floor, The Forum, G-20, Khayaban-e-Jami, Clifton, Block 9, Karachi TRUSTEE MCB Financial Services Limited Business Office: 3rd Floor, Adamjee House, I. I. Chundrigar Road, Karachi JS CAPITAL PROTECTED FUND V (Capital Protected Scheme) OFFERING DOCUMENT Managed by JS Investments Limited Initial Offering for Public (IOP) Period: May 30, 2016 to June 06, 2016 (Both days inclusive) This Offering Document contains necessary information for prospective investors to make an informed decision to invest in the Fund described herein. Prospective investors are advised in their own interest to carefully read the contents of this Offering Document and in particular the Risk Disclosure mentioned in Clause 3.8, Warning and Disclaimer in Clause 10 and Taxation in Clause 8 before investing. Investors may note that this Offering Document remains effective until a material change occurs and they should retain this Offering Document for future reference. Material changes shall be subject to prior approval from the Securities and Exchange Commission of Pakistan (SECP) and shall be circulated to all Investors or may be publicly notified by advertisements in the newspapers subject to the applicable provisions of the Trust Deed, the Rules and the Regulations. Investors should realize that all Investments involve risk. It should be clearly understood that the portfolio of JS Capital Protected Fund V offers Capital Protection through its Investment Structure and is subject to market risks inherent in all such Investments. The value of the Units in the Fund may appreciate as well as depreciate. The Management Company and/or the Trustee does not undertake or offer or issue or assume any guarantee for the protection of the principal investment or any return on such Investment by the Client and the investment portfolio of the Fund is subject to market and other risks. If you have any doubt about the contents of this Offering Document, you should seek independent professional advice from your legal, financial and/ or other professional adviser(s). The particulars of this Fund under this Offering Document have been prepared in accordance with the Non-Banking Finance Companies and Notified Entities Regulations, 2008 and filed with SECP. It must be distinctly understood that in giving this approval, SECP does not take any responsibility for the financial soundness of the Fund nor for the accuracy of any statement made or any opinion expressed in this Offering Document. This Offering Document is dated as at May 30, 2016.

2 MANAGEMENT COMPANY JS Investments Limited Registered Office: 7 th Floor, The Forum, G-20, Khayaban-e-Jami, Clifton, Block 9, Karachi TRUSTEE MCB Financial Services Limited Business Office: 3rd Floor, Adamjee House, I. I. Chundrigar Road, Karachi REGISTRAR/TRANSFER AGENT Technology Trade (Private) Limited Registered Office: Dagia House, 241 C, Block 2, PECHS, Karachi. AUDITORS TO THE FUND GRANT THORNTOM ANJUM REHMAN (Chartered Accountants) Registered Address: 1 st and 3 rd Floor, Modern Motors House, Beaumont Road, Karachi LEGAL ADVISER Bawaney & Partners Registered Address: 3 rd and 4rd Floor, Plot 68-C, Lane 13, Bokhari Commercial Area, DHA Phase VI, Karachi

3 CLAUSE TABLE OF CONTENTS PAGE NO. FILLING OF OFFERING DOCUMENT 6 1. CONSTITUTION OF THE FUND Constitution Trust Deed (the Deed ) Modification of Trust Deed Duration/Minimum Life of the Fund Deposited Property/Trust Property Free Accidental Death Insurance Cover Initial Period /Initial Offering Period (IOP) Suspension of Issuance of Units after the Initial Period Offering Document Modification of Offering Document Responsibility of the Management Company for information given in this Document 9 2. CAPITAL PROTECTION 9 3. CATEGORY, INVESTMENT OBJECTIVES, INVESTMENT POLICY, RESTRICTIONS, RISK DISCLOSURE AND DISCLAIMER Category of the Fund Investment Objective Investment Policy Benchmark: Authorized Investments Changes in Investment Policy Investment Restrictions Risk Disclosure OPERATORS AND PRINCIPALS Management Company Founding Institutional Investors Corporate Information Performance of the Listed Companies where Directors of JS Investments are holding similar office Overview of the Existing Open End Schemes Performance of Existing Open-End Schemes under Management of JS Investments Limited Role and Responsibilities of the Management Company Maintenance of Unit Holders Register Role of the Trustee Trustee shall also act as Custodian Registrar/Transfer Agent Distributors/Sales Facilitators Auditors Legal Advisors Bankers Rating of the Fund Minimum Fund Size CHARACTERISTICS OF UNITS Units Classes and Types of Units Purchase and Redemption of Units Procedure for Purchase of Units Procedure for Redemption of Units Purchase and Redemption of Units outside Pakistan Determination of Redemption Price 40

4 5.8 Procedure for Requesting Change in Unit Holder Particulars Procedure for Pledge / Lien / Charge of Units Temporary Change in Method of Dealing, Suspension of Dealing and Queue System (Force Majeure) DISTRIBUTION POLICY Declaration of Dividend and Mandatory Reinvestment Determination of Distributable Income Closure of Register FEE AND CHARGES Fees and Charges Payable by an Investor Fees and Charges Payable by the Fund Formation Costs Other costs and expenses TAXATION AND ZAKAT Taxation on the Income of the Fund Withholding tax Zakat on Fund Taxation and Zakat on Unit Holders REPORTS TO UNIT HOLDERS Account Statement Financial Reporting Trustee Report Fund Manager Report WARNING AND DISCLAIMER Warning Disclaimer GENERAL INFORMATION Accounting Period / Financial Year of the Fund Inspection of Constitutive Documents Transfer of Management Rights of the Fund Extinguishment/Revocation of the Fund Procedure and manner of Revocation of the Fund Distribution of proceeds on Revocation GLOSSARY 53 ANNEXURE A - CURRENT LEVEL OF FRONT-END LOAD AND CONTINGENT LOAD AND THE MANAGEMENT FEE EFFECTIVE FOR THE FUND 58 ANNEXURE B - TARIFF STRUCTURE OF THE TRUSTEE 59 ANNEXURE C - CUT-OFF TIMINGS 60 ANNEXURE D - LIST OF AUTHORIZED BRANCHES OF THE DISTRIBUTOR(S) 61

5 OFFERING DOCUMENT OF JS CAPITAL PROTECTED FUND V An Open-end Capital Protected Scheme MANAGED BY JS Investments Limited An Asset Management Company licensed to provide Asset Management and Investment Advisory Services by Securities and Exchange Commission of Pakistan under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 INTRODUCTION TO JS CAPITAL PROTECTED FUND V Established in Karachi, Pakistan as an open-end Fund by a Trust Deed, dated March 14, 2016 registered under the Trust Act, 1882 by and between JS Investments Limited, as the Management Company and MCB Financial Services Limited, as the Trustee, and registered by Securities and Exchange Commission of Pakistan (SECP) as a notified entity under the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the Regulations ). REGULATORY APPROVAL AND CONSENT Approval of the Securities and Exchange Commission of Pakistan The Securities and Exchange Commission of Pakistan (SECP) has registered JS Capital Protected Fund (JS CPF V) under Regulation 44 of the Regulations vide letter No. SCD/AMCW/JSCPF-V/433/2016 dated April 21, The SECP has approved this Offering Document under Regulation 54 of the Regulations vide its letter No. SCD/AMCW/JSCPF-V/502/2016 dated May 26, It must be distinctly understood that in giving this approval, SECP does not take any responsibility for the financial soundness of the Fund or for the accuracy of any statement made or any opinion expressed in this Offering Document. Investors should realize that all Investments involve risk. It should be clearly understood that the portfolio of the Fund is subject to market risks inherent in all such Investments. The value of the Units in the Fund may appreciate as well as depreciate as well as the level of dividend declared by the Fund may go down as well as up. If you have any doubt about the contents of this Offering Document, you should seek independent professional advice from your legal, financial and/ or other professional adviser(s). GOVERNING LAW The Trust Deed and this Offering Document of the Fund shall be subject to and be governed by the laws of Pakistan including the Ordinance, the Rules, the Regulations and all other applicable rules, regulations, circulars, directives and guidelines as amended or substituted from time to time and it shall be deemed for all purposes whatsoever that all the provisions required to be contained in a Trust Deed by the Rules, Regulations, circulars, directives are incorporated in the Trust Deed of the Fund as a part and parcel thereof and in the event of any conflict between the Trust Deed of the Fund and the Regulations/circulars/directives, the latter shall supersede and prevail over the provisions contained in the Trust Deed of the Fund. In case the Rules or Regulations are amended or any directives/circulars are issued or any relaxations or exemptions are allowed thereunder, such amendments, directives, circulars, relaxations and exemptions shall deem to have been included in the Trust Deed and this Offering Documents. In the event of any conflict between this Offering Document and the Trust Deed of the Fund, the latter shall supersede and prevail over the provisions contained in this Offering Document. The

6 Management Company, Trustee and the Fund shall be subject to full compliance of the Rules, the Regulations, the Trust Deed and this Offering Document. FILLING OF OFFERING DOCUMENT The Management Company has filed a copy of this Offering Document signed by the Chief Executive along with the Trust Deed [document (1) below] with SECP. Copy of these documents along with documents (2) to (8) below can be inspected at the registered office of the Management Company or the place of business of the Trustee, at their addresses provided in the Clause 1.1 of this Offering Document. 1. Trust Deed (Deed) of the Fund dated March 14, 2016 by and between JS Investments Limited, as the establisher and the Management Company, and MCB Financial Services Limited, as the Trustee; 2. SECP s License No. AMCW /13/JSIL/AMS/05/2013, dated May 16, 2013 renewing the license of JS Investments Limited, to undertake asset management services; 3. SECP s letter No. SCD/AMCW/JSCPF-V/433/2016 dated April 21, 2016 registering the Fund as Notified Entity; 4. SECP's letter No. SCD/AMCW/JSCPF/334/2016 dated March 09,2016 approving the appointment of MCB Financial Services Limited as the Trustee of the Fund ; 5. SECP's letter No. SCD/AMCW/JSCPF-V/502/2016 dated May 26, 2016, approving this Offering Document; 6. Letter of consent by the Transfer Agent, Technology Trade (Private) Limited dated January 27, 2016 vide letter No. TTPL\PRO\2016\209 to act as the Registrar / Transfer Agent for the Fund ; 7. Letter of consent by the Legal Adviser, Bawaney & Partners, for the Fund dated February 1, 2016 vide letter no. JSIL(GF)-1/190/16/ Master Policy Agreement issued by M/s EFU Life Assurance Limited for Free Accidental Death Cover. 1. CONSTITUTION OF THE FUND 1.1 Constitution JS Capital Protected Fund V (an open end fund) is constituted by a Trust Deed entered into at Karachi on March 14, 2016 between: JS INVESTMENTS LIMITED (JSIL), a listed public limited company incorporated in Pakistan under the Companies Ordinance 1984, with its registered office at 7th Floor, The Forum, Block-9, G-20, Khayaban-e-Jami, Clifton, Karachi (hereinafter called the "Management Company" which expression where the context so permits shall include its successors in interest and assigns) of the one part; and MCB Financial Services Limited, an unlisted public limited company incorporated in Pakistan under the Companies Ordinance, 1984, having its business office at 3rd Floor, Adamjee House, I. I. Chundrigar Road, Karachi (hereinafter called the "Trustee" which expression where the context so permits shall include its successors in interest and assigns) of the other part. 1.2 Trust Deed (the Deed ) The Deed is subject to and governed by the Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003 and Non-Banking Finance Companies and Notified Entities Regulations, 2008, Securities and Exchange Ordinance 1969, Companies Ordinance 1984 and all other applicable laws and regulations. The terms and conditions in the Deed and any Supplemental Deed(s) shall be binding on each Unit Holder. In the event of any conflict between the Offering Document and the Deed, the latter shall supersede and prevail over the provisions contained in this Offering Document. In the event of any conflict between the Deed and the Rules

7 or Regulations and Circulars issued by SECP, the latter shall supersede and prevail over the provisions contained in the Deed. 1.3 Modification of Trust Deed The Trustee and the Management Company, acting together and with the approval of SECP, shall be entitled by Supplemental Deed(s) to modify, alter or add to the provisions of the Deed to such extent as may be required to ensure compliance with any applicable laws, Rules and Regulations. Where the Deed has been altered or supplemented, the Management Company shall duly notify to the Unit Holders and post the same on their official website. ( 1.4 Duration/Minimum Life of the Fund The Duration of the Fund is twenty four (24) months and six (06) week, starting from the first day of the commencement of the Initial Offering Period (IOP). The Fund shall stand automatically dissolved after the Minimum Life of the Fund. Upon the Fund being dissolved the Management Company shall suspend issue and redemption of Units forthwith and proceed to liquidate / sell all Investments as part of the Deposited Property / Trust Property and shall repay all borrowing effected by the Trust together with any markup remaining unpaid. All Units shall stand automatically redeemed on completion of Minimum Period and redemption proceeds will be paid on the last day of the Minimum Period upon automatic dissolution of the Fund (after the completion of the Minimum Life of the Fund) at the Redemption Price which shall be determined by the Management Company after completion of the realization of all Investments. The Redemption Price so determined by the Management Company shall not fall below the initial Investment Value subject to Clause 2. (Capital Protection) and Clause 3.3 (Investment Policy) of this Offering Document, respectively. However, SECP or the Management Company may wind it up or revoke the fund, on the occurrence of certain events as specified in the Regulations or Clause 11.4 (Extinguishment/Revocation of the Fund) of this Document. 1.5 Deposited Property/Trust Property The aggregate proceeds of the sale of all Units after deducting therefrom or providing thereout any applicable Sales Load and Duties and Charges and Transaction Costs and any other expenses chargeable to the Fund and after adding thereto any charges for redemption of Units before the Minimum Period in the form of Contingent Load as specified in the Offering Document; and includes the Investment and all income, profit and other benefits arising therefrom and all cash, bank balances and other assets and property of every description for the time being held or deemed to be held upon trust by the Trustee for the benefit of the Holders pursuant to the Deed. 1.6 Free Accidental Death Insurance Cover JSIL proudly offers a Free Accidental Death Insurance Cover by M/s. EFU Life Assurance Limited to all the eligible individual clients investing in the Fund as per the Coverage Eligibility Matrix: Coverage Eligibility Matrix Minimum Principal Investment Threshold (Qualification Criteria) - PKR Equal to or More than 500,000 Equal to 500,001, up to 1,000,000 Equal to 1,000,001, up to 1,500,000 Equal to 1,500,001, up to 2,000,000 Free Accidental Death Cover - PKR 1.0 Million 2.0 Million 3.0 Million 4.0 Million

8 It must be noted that the Client shall not be required to pay any extra charges for the subject insurance cover. Moreover, such Clients shall only be eligible for the Free Accidental Insurance Cover if they have been charged with a 100% Front-End Load. All Clients of the Fund, in addition to meeting the Minimum Principal Investment Threshold as stated in the Coverage Eligibility Matrix, must also fulfill the below stated Eligibility Criteria to become eligible for the subject Free Accidental Death Cover. Eligibility Criteria a) All individuals between the age of 18 years (minimum age) and 59 years (maximum age), shall be eligible for insurance cover enrollment. Age shall be ascertained on the basis of nearest birthday b) All individuals falling between the age of 18 years (minimum age) and 60 years (maximum age) shall be eligible for coverage benefit. For the purposes of clarity the nominated beneficiary of the enrolled Client shall only be eligible for receiving the claim/ benefit if the life of the enrolled Client falls between 18 to 60 years (nearest birthday) on the date of his/her Accidental Death (Insured Event). c) The total amount of claim shall be according to the Coverage Eligibility Matrix stated above and shall, under no circumstances whatsoever, not exceed PKR 4.0 million. d) The coverage shall commence on the first day immediately following the completion of the Initial Offering Period and shall end upon completion of twenty four (24) months from the date of commencement. In case of Redemption by the Client prior to such period, the insurance cover shall stand withdrawn/cancelled. e) All eligible Clients shall be required to provide such information / documents/proofs as may be required by EFU Life Assurance Limited. f) Insurance Cover shall not be transferable. 1.7 Initial Period /Initial Offering Period (IOP) Initial Offering is made during the Initial Period, which shall be six (6) Dealing Days and begins at the start of the banking hours on May 30, 2016 and shall end at the close of the banking hours on June 06, From the first day of the commencement off the Initial Offering Period, the Units shall be issued at the Offer Price. Clarification: Up to the commencement of the Initial Offering Period (IOP), the Units of the Fund shall be issued at the Initial Price. For the purposes of clarity it is stated that the amounts received from the Investors up to the commencement of the Initial Offering Period shall be deposited in a separate Bank Account titled MCBFSL-Trustee JS Capital Protected Fund V Pre-IOP. Income earned in this account up to the day immediately preceding the Initial Offering Period shall, after deducting all expenses that may be incurred by the Management Company, be paid to the Investors in proportion to their respective investments in the form of additional Units. Provided that the additional Units, so issued, shall be issued at Par Value and shall not be charged a Front-End Load. The total amount available in the account at the commencement of the Initial Period shall be transferred to the main Bank Account of the Fund 1.8 Suspension of Issuance of Units after the Initial Period After the Initial Period (Initial Offering Period), the issuance of fresh Units will be suspended and such suspension shall, however, not affect existing subscribers for the issuance of fresh Units as a result of mandatory reinvestment of the distribution of income. Subject to prior approval of the SECP and at the discretion of Management Company, the fresh Units may be issued after the Initial Period at Offer Price calculated on the basis of NAV on each

9 Dealing Day. Except for circumstances elaborated in Clauses 5.10 (Temporary Change in Method of Dealing, Suspension of Dealing and Queue System (Force Majeure)) and 11.4 (Extinguishment/Revocation of the Fund ) of this Offering Document, such prices shall be applicable to Purchase and Redemption requests, complete in all respects, received during the Business Hours on the Dealing Day. 1.9 Offering Document The provisions of the Trust Deed, the Rules, the Regulations, circulars and the directives issued by the Commission govern this Offering Document. It sets forth information about the Fund that a prospective investor should know before investing in any Unit. Prospective investors in their own interest are advised to carefully read this Offering Document to understand the Investment Policy, Risk Factors, Warning and Disclaimer and should also consult their legal, financial and/or other professional adviser(s) before investing Modification of Offering Document This Offering Document will be updated to take into account any relevant material changes relating to the Fund. Such changes shall be subject to prior consent of the Trustee and approval from the SECP and shall be circulated to all Unit Holders and/ or publicly notified by advertisements in the newspapers subject to the provisions of the Rules and the Regulations and duly posted on official website of the Management Company. ( Responsibility of the Management Company for information given in this Document Management Company accepts the responsibility for the information contained in this Offering Document as being accurate at the date of its publication. 2. CAPITAL PROTECTION a) Capital Protection is envisaged to be provided through the Investment structure of the Fund as detailed in Clause 3.3 (Investment Policy) and not through an undertaking by the Management Company and/or the Trustee. b) Capital Protection means that the Net Realizable Value of Investment at the completion of the Minimum Life of the Fund should not fall below the Initial Investment Value subject to Clause above and only if the Investment is held for a Minimum Period as per the terms laid down in this Offering Document. c) Capital Protection shall not be valid if Units of the Fund are redeemed before the Minimum Period and a Contingent Load shall be charged as per details specified in this Offering Document. d) The Fund shall be closed for new subscriptions from the date of conclusion of the Initial Offering Period. e) The Fund may be re-opened for subscription from time to time as and when determined by the Management Company with prior approval of the SECP and after providing appropriate notice to investors in order to protect the interests of the Unit Holders of the Fund. The Management Company shall comply with the terms of approval specified by SECP, to protect the interest of Holders. f) Any Redemption of Units during the Life of the Fund on a specific date would be based on the NAV of the Fund on the day on which such request is received within the Cut-Off Time, as specified in Annexure C and will be charged a Contingent Load and the Capital Protection does not apply in this case to such Units. g) The Capital Protection of the Fund is only valid in terms of the base currency i.e. the Pakistani Rupee. In addition, Capital Protection is only valid in terms of the current tax and legal

10 environment of Pakistan and is subject to Force Majeure factors as specified in Clause 5.10 (Temporary Change in Method of Dealing, Suspension of Dealing and Queue System (Force Majeure)) of this Offering Document. h) Capital Protection shall also not valid in case Fund is terminated before the expiry of the Minimum Life of the Fund, as specified in Clause 1.4 (Duration/Minimum Life of the Fund) and 11.4 (Extinguishment/Revocation of the Fund ) of this Offering Document. 3. CATEGORY, INVESTMENT OBJECTIVES, INVESTMENT POLICY, RESTRICTIONS, RISK DISCLOSURE AND DISCLAIMER 3.1 Category of the Fund JS Capital Protected Fund V is a Capital Protected Scheme as per the criteria for categorization of open-end collective investment schemes specified by SECP, as amended from time to time. 3.2 Investment Objective JS Capital Protected Fund V aims at protecting investor capital through the Investment structure by placing a significant percentage of the Fund s Deposited Property as term deposit(s) with M/s. Bank Alfalah Limited, a Scheduled Commercial Bank(s), having a long term rating of AA with a positive outlook (Capital Protection Portion). 3.3 Investment Policy In line with the Investment Objectives, the JS Capital Protected Fund V shall invest a minimum of 88.0 percent (approx) of the Trust Property in term deposit(s) with M/s.Bank Alfalah Limited at the time of initial placement which would be necessary to ensure the Capital Protection of the Initial Investment Value till the end of the Minimum Period, to be called as Capital Protection Portion of the Fund. Such term deposit shall be placed within two (02) weeks of the conclusion of the Initial Offering Period. The remaining Trust Property, to be called as Investment Portion of the Fund, shall be invested primarily in equity markets or any other Authorized Investment instruments that the Management Company feels would be appropriate to maximize return through an aggressive asset allocation strategy The primary aim of the Fund's Investment Portion shall be to determine the mix of fixed income, equities and money market instruments that offers the potential to beat term deposit returns and maximize the capital gains keeping in view its relatively low risk profile as a capital protected product. The proportion of asset allocation shall be based on the expected returns and risks as evaluated by the Management Company and it may change from time to time as the Management Company deems fit The Capital Protection is only valid in terms of the current tax and legal environment of Pakistan and is subject to Force Majeure factors such as bankruptcy of the Commercial Bank (currently AA rated Scheduled Commercial Bank) with which the Fund has placed the Capital Protection Portion as TDR In case the rating of a Bank is reduced or institution is placed on watch list, the Investment shall be realized to reasonably protect the interest of the Unit Holders The Fund shall be subject to such exposure limits as are specified in the Regulations and SECP s directives Any Investment may at any time be disinvested at the sole discretion of the Management Company either in order to invest the proceeds of sale in other Authorized Investments or to provide funds required for the purpose of any provision of Trust Deed or may retain the proceeds of sale in cash deposit as aforesaid or any combination of the aforesaid. Any Investment, which

11 ceases to be an Authorized Investment, would be disinvested within the prescribed period in the best interest of the Unit Holders Any Investment made outside Pakistan shall be subject to prior approval of the State Bank of Pakistan and SECP. 3.4 Benchmark: The benchmark of the Fund for any period of return shall be the Weighted Average Daily Return of KSE-100 Index and Three (3) Months Deposit Rate of a Double A minus (AA-) or above rated Bank based on the Fund s actual Proportion in the Investment and Capital Protection Portions The Management Company may, if deemed appropriate, determine another performance benchmark for the Fund under prior approval of SECP and intimation to the Unit Holders, the Trustee by amending this Offering Document. 3.5 Authorized Investments Asset Allocation of the Capital Protection Portion Capital Protection Portion of the Fund shall be placed under TDR (Term Deposit Receipt) with M/s.Bank Alfalah Limited Asset Allocation of the Investment Portion In line with Investment Objective, the Fund will seek to make Investments in all the Authorized Investments classes with an aggressive asset allocation strategy in order to maximize the overall return of the Investment Portion. The overall Authorized Investment matrix shall be as listed below: S.No Authorized Investment Capital Protection Portion: 1 TDR placed with Bank Alfalah Limited Investment Portion: 1 Listed Equity Securities 2 Placement with Commercial Banks Cash in Bank 3 Accounts (excluding TDRs ) Treasury Bills and other fixed income 4 Govt. Securities not exceeding 90 days maturity Other Fixed Income 5 or Money market Securities 6 Other Eligible Instruments Minimum Rating of Entity Instrument Exposure Limits (% of Net Assets) Minimum Maximum Investment Investment AA- N/A 88% 100% N/A N/A 0% 12% A N/A 0% 12% A N/A 0% 12% N/A N/A 0% 12% BBB N/A 0% 12% N/A N/A 0% 12% The Investment in asset classes mentioned above will be subject to such exposure limits and minimum ratings as specified herein and/or otherwise as specified in the Regulations/ directives/

12 circulars or by SECP from time to time. JS Capital Protected Fund V Offering Document Risk Control in the Investment Process Consistent with the Investment objective of the Fund, the Investment Committee shall aim to identify Investment opportunities which offer superior returns at lower level of risk. The Investment Committee will continuously monitor the macro-economic environment, including the political and economic factors, money supply in the system, among others affecting the liquidity and interest rates. Investment process would also require disciplined risk management. The Management Company has adequate controls to safeguard against risks in the portfolio construction process. The Investment Restrictions defined in Clause 3.7 will reduce risk and result in portfolio diversification Management Company Can Alter Investment Mix in the Investment Portion The Management Company can from time to time alter the weightings within the Investment Portion, subject to the specified limits as per Clause above, between the various types of Investments if it is of the view that market conditions so warrant. The assets not invested in the foregoing avenues shall be placed as deposit with Scheduled Commercial Banks. 3.6 Changes in Investment Policy The Investment Policy will be governed by the Regulations and/or SECP directives. Any fundamental change in the Investment Policy will be implemented only after obtaining prior approval from SECP and giving ninety (90) days prior notice to the Unit Holders as specified in the Regulations. 3.7 Investment Restrictions (a) The Deposited Property shall be subject to such exposure limits or other prohibitions as are provided in the Regulations, Trust Deed, this Offering Document of the Fund, circulars and directives and shall also be subject to any exemptions that may be specifically given to the Fund by SECP and are explicitly mentioned under the heading Exceptions to Investment Restriction in this Offering Document or subsequently in writing. If and so long as the value of the holding in a particular company or sector shall exceed the limit imposed by the Regulations, the Management Company shall not purchase any further Investments in such company or sector. In the event Exposure limits are exceeded due to corporate actions including taking up rights or bonus issue and/or owing to appreciation or depreciation in value of any Investment, disposal of any Investment or Redemption of Units, the excess exposure shall be regularized in such manner and within such time as specified in the Regulations, circular or notification issued by SECP from time to time. (b) The Management Company, on behalf of the Fund, shall not enter into transactions with any broker that exceeds the limit provided in the Regulations and or circulars and notifications issued by the Commission from time to time. Transactions relating to money market instruments and debt securities do not fall under this clause. (c) The Management Company on behalf of the Fund shall not: i. Purchase or sell - a. Bearer securities; b. Securities on margin; c. Real estate, commodities or commodity contracts; d. Securities which result in assumption of unlimited liability (actual or contingent); e. Anything other than Authorized Investments as defined herein;

13 ii. iii. iv. Participate in a joint account with others in any transaction; Invest/place the Capital Protection Portion of the Fund with a commercial bank with rating of lower than AA-; Affect a short sale in a security whether listed or unlisted; v. Purchase any security in a forward contract; vi. vii. viii. ix. Take exposure in any other Collective Investment Fund. Lend, assume, guarantee, endorse or otherwise become directly or contingently liable for or in connection with any obligation or indebtedness of any person as specified in the Regulation; Make any Investment which will vest with the Management Company or its group the management or control of the affairs of the investee company. Invest in securities of the Management Company x. issue a senior security which is either stock or represents indebtedness, without the prior written approval of the SECP. xi. xii. xiii. xiv. xv. xvi. xvii. xviii. apply for de-listing from Stock Exchange, unless it has obtained prior written approval of the Commission. sell or issue Units for consideration other than cash unless permitted by the SECP on the basis of structure and Investment policy of the Fund. merge with, acquire or take over any Fund, unless it has obtained the prior approval of the SECP in writing to the Fund of such merger, acquisition or take over. invest the subscription money until the closure of the Initial Offering Period. enter on behalf of the Fund, into underwriting or sub-underwriting contracts. subscribe to an issue underwritten, co-underwritten or sub-underwritten by group companies of the Management Company. pledge any of the securities held or beneficially owned by the Fund except as allowed under the Regulations. accept deposits. xix. make a loan or advance money to any person from the assets of the Fund. xx. xxi. xxii. take exposure of more than thirty five percent (35%) of its Net Assets in any single group and more than ten percent (10%) of its Net Assets in listed group companies of the Management Company and such exposure shall only be taken through secondary market. Take exposure in securities of any one sector as per classification of the Stock Exchange of more than thirty percent (30%) of the Fund s Net Assets or index weight of the sector, whichever is higher, subject to the limit of thirty-five percent (35%) of the Fund s Net Assets take exposure to any single entity that exceeds an amount equal to ten percent (10%) of total Net Assets of the Fund, subject to the condition; a. Exposure to equity securities of a company in excess of ten percent (10%) of the issued capital of that company.

14 b. Exposure to any debt issue of a company shall not exceed ten percent (10%) of that issue. Provided that subject to the condition prescribed above the exposure of an the Fund to any single entity shall not exceed an amount equal to ten percent (10%) of the Net Assets of the Fund or the index weight of the security subject to the limit of fifteen percent (15%), whichever is higher. xxiii. place funds with any NBFC or Modaraba. (d) In case of redemptions requests are pending due to constraint of liquidity in the Fund, for more than the period as stipulated in the Regulations, the Management Company on behalf of the Fund shall not make any fresh Investment. Exemption to Investment Restrictions In order to protect the rights of the Unit Holders, the Management Company may take an Exposure in any unauthorized investment for recovery of any defaulted amounts from any counter party of any Authorized Investment with the approval of the SECP Financing Arrangements (a) Subject to any statutory requirements for the time being in force and to the terms and conditions herein contained, the Management Company may arrange borrowing for account of the Fund, with the approval of the Trustee, from Banks or Financial Institutions, or such other companies as specified by the SECP from time to time. The borrowing, however, shall not be resorted to, except for meeting the redemption requests and shall be repayable within a period of ninety days and such borrowing shall not exceed fifteen (15) percent of the Net Assets or such other limit as specified by the SECP of the Fund at the time of borrowing. If subsequent to such borrowing, the Net Assets are reduced as a result of depreciation in the market value of the Deposited Property or redemption of Units, the Management Company shall not be under any obligation to reduce such borrowing. (b) Neither the Trustee, nor the Management Company shall be required to issue any guarantee or provide security over their own assets for securing such financings from Banks, Financial Institutions and non banking finance companies specified by the SECP. The Trustee or the Management Company shall not in any manner be liable in their personal capacities for repayment of such financings. (c) For the purposes of securing any such borrowing, the Trustee may on the instruction of the Management Company mortgage, charge or pledge in any manner all or any part of the Deposited Property provided that the aggregate amount secured by such mortgage, charge or pledge shall not exceed the limits provided under the Regulations and/or any law for the time being in force. (d) Neither the Trustee nor the Management Company shall incur any liability by reason of any loss to the Trust or any loss that a Unit Holder(s) may suffer by reason of any depletion in the Net Asset Value that may result from any financing arrangement made hereunder in good faith Restriction on Transactions with Connected Persons (a) The Management Company in relation to the Fund shall not invest in any security of a company if any director or officer of the Management Company owns more than five per cent of the total amount of securities issued, or, the directors and officers of the Management Company own more than ten per cent of those securities collectively subject to exemption provided in the Regulations. (b) The Management Company on behalf of the Fund shall not without the approval of its Board of Directors in writing and consent of the Trustee, purchase or sell any security from or to any Connected Person or employee of the Management Company. (c) Provided that above shall not be applicable on sale or redemptions of Units of the Fund.

15 (d) For the purpose of sub-paragraphs (a) and (b) above the term director, officer and employee shall include spouse, lineal ascendants and descendants, brothers and sisters. (e) All transactions carried out by or on behalf of the Fund with connected person(s) shall be made as provided in the Constitutive Documents, and shall be disclosed in the Fund s annual reports. 3.8 Risk Disclosure Investors must realize that all Investments in mutual funds and securities are subject to market risks. Our target return / dividend range cannot be guaranteed and it should be clearly understood that the portfolio of the Fund is subject to market price fluctuations and other risks inherent in all such Investments. The risks emanate from various factors that include, but are not limited to: (1) Equity Risk - Companies issue equities, or stocks, to help finance their operations and future growth. The Company s performance outlook, market activity and the larger economic picture influence the price of a stock. Usually when the economy is expanding, the outlook for many companies is good and the stock prices may rise and vice versa. (2) Government Regulation Risk - Government policies or regulations are more prevalent in some securities and financial instruments than in others. The Fund s that invest in such securities may be affected due to change in these regulations or policies, which directly or indirectly affect the structure of the security and/or in extreme cases a governmental or court order could restrain payment of capital, principal or income. (3) Credit Risk - Credit Risk arises from the inability of the issuers of the instruments or counterparties, to fulfill their obligations. The risk is generally limited to principal amount and accrued interest there on, if any. a) Default Risk - The risk that the issuer of the security will not be able to pay the obligation, either on time or at all; b) Credit Spread Risk - The risk that there may be an increase in the difference between the return/markup rate of any issuer's security and the return/markup rate of a risk free security. The difference between this return/mark up rates is called a "credit spread". Credit spreads are based on macroeconomic events in the domestic or global financial markets. An increase in credit spread will decrease the value of income and including money market instruments; (4) Price Risk - Changing value of a security or a fund can be mostly due to stock/fund price fluctuations. Price Risk is the biggest risk faced by all investors and price risk can be minimized through diversification and efficient fund management. (5) Liquidity Risk Liquidity risk arises when a transaction cannot be conducted at prevailing market prices due to insufficient market activity. (6) Settlement Risk The risk that counterparty will not deliver the security or cash for a trade it has entered into, on time. (7) Reinvestment Rate Risk In a declining interest/ markup rate economic environment, there is a risk that maturing securities or coupon payments will be reinvested at lower rates, which shall reduce the return of the Fund compared to return earned in the preceding quarters. (8) Events Risk - There may be adjustments to the performance of the Fund due to events including but not limited to, natural calamities, market disruptions, mergers, nationalization, insolvency and changes in tax law. (9) Redemption Risk - There may be special circumstances in which the redemption of Units may be suspended or the redemption payment may not occur within six working days of receiving a request for redemption from the investor.

16 (10) Distribution Taxation Risk Dividend distribution may also be liable to tax because the distributions are made out of the profits earned by fund and not out of the profits earned by each Unit Holder. Unit Holders who invest in a fund before distribution of dividends may be liable to pay tax even though they may not have earned any gain on their Investment as return of capital to investors upon distribution is also taxable. (11) Fund Specific Risks The Fund is subject to the following risks: (i) Capital Protection will not be valid if Units of the Fund are redeemed before the Minimum Period. (ii) The performance of the Fund may be affected by changes in risk associated with trading volumes, liquidity and settlement systems in equity and debt markets. (iii) JS CPF V is an Open end Mutual Fund and, Unit Holders are not being offered any guaranteed returns. (iv) If the Fund for any reasons as determined by the Management Company, is terminated, the NAV of the Fund will be subject to fluctuations in the value of the Fund's assets. The Net Asset Value, in this case, may be lower or higher than the Initial Investment Value. The Management Company will refund investors their investment in the Fund based on the NAV per Unit after deducting Bank and administrative charges (if any). (v) The Fund, in its endeavor to seek Capital protection, may allocate the entire portfolio to underlying Investments in the Capital Protection Portion under the Authorized Investments mentioned in this Offering Document and the Fund may remain invested in such underlying Investments for the entire/remaining tenure of the Fund without any participation in the equity component of the Investment Portion There may be times when a portion of the Investment portfolio of the Fund is not compliant either with the Investment policy or the minimum Investment criteria of the assigned category. This non-compliance may be due to various reasons including, adverse market conditions, liquidity constraints or Investment specific issues. Investors are advised to study the latest Fund Manager Report of the Fund, especially portfolio composition and Financial Statements of the Fund to determine what percentage of the assets of the Fund, if any, is not in compliance with the minimum Investment criteria of the assigned category. The latest monthly Fund Manager Report as per the format prescribed by Mutual Funds Association of Pakistan (MUFAP) and financial statements of the Fund are available on the website of the Management Company and can be obtained by calling / writing to the Management Company. Disclaimer The Units of the Trust are not Bank deposits and are neither issued by, insured by, obligations of, nor otherwise supported by SECP, any Government agency, the Trustee (except to the extent specifically stated in this document and the Deed) or any of the shareholders of the Management Company or any other Bank or Financial Institution. 4. OPERATORS AND PRINCIPALS 4.1 Management Company The Management Company is engaged, inter alia, in the business of providing asset management services and has been licensed by the Securities and Exchange Commission of Pakistan (SECP) under then applicable Rule 5 (2) of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 which has been renewed under license no. AMCW/13/JSIL/AMS/05/2013, dated May 16, 2013, JS Investments Limited is a public limited company listed on the Pakistan Stock Exchange with a paid up capital of PKR million (as on April 30, 2016).

17 Founded in 1995, JS Investments Limited (JSIL) is the oldest and one of the largest private sector asset management companies in Pakistan with assets under management spread across ten (10) mutual funds, two (2) pension Funds and various separately managed accounts (Specialized Portfolio Management Mandates). JSIL s successful track record, creative and diverse thinking and product offering has helped set the asset management industry standards in Pakistan by always endeavoring to innovate and be the first to bring new financial products to Pakistan, providing investors the opportunity to better manage their wealth. JSIL has successfully done this by being the first to offer Balanced, Islamic, Fund of Funds, Asset Allocation, Free-Float Based Index, Capital Protected and Aggressive Income open-end funds. JSIL is associated with the Jahangir Siddiqui (JS) Group, which is one of the leading financial services groups of Pakistan maintaining a strong presence in the nation's banking, corporate finance, equity market operations and insurance sectors. 4.2 Founding Institutional Investors The founding institutional investors included Jehangir Siddiqui & Co Limited, INVESCO Plc. and the International Finance Corporation. Currently, JS Investments is a subsidiary of JS Bank Limited. JS Bank Limited ( JS Bank Limited is the holding company of JS Investments Limited. Formed as a result of the merger and amalgamation of Jahangir Siddiqui Investment Bank Limited and commercial operations of Amercian Express Bank Limited Pakistan, JS Bank commenced operations in Pakistan as a fully Scheduled Bank in December It is currently one of the fastest growing Commercial Banks in Pakistan with over 277 branches spreading over more than a 138 cities. JS Bank is rated A+ ( A plus ) long-term and A1+ ( A one plus ) short-term by the PACRA and has been declared by State Bank of Pakistan as number one Primary Dealer of Government Securities for two consecutive years. JSBL is backed by Jahangir Siddiqui & Co Limited, which was the first Pakistani financial services company to boast a Wall Street pedigree as it was previously a joint venture with Bear Stearns and Co. (JSCL was previously named as Bear Stearns Jahangir Siddiqui Ltd.).

18 4.3 Corporate Information A -Board of Directors of JS Investments - Synopsis Name, Occupation and Address 1. Mr. Ali Akhtar Ali, Chief Executive Officer Hanging Garden, Flat 27, Khayaban-e-romi, Clifton, Block 5, Karachi 2. Mr. Suleman Lalani, Director Business Executive B-601, Clifton Belle View Apartments, Block 5, Clifton, Karachi 3. Mr. Muhammad Raza Dyer, Director Business Executive Other Directorships Director (i) JS ABAMCO Commodities Limited Director (i) Al-Abbas Sugar Mills Limited (ii) Jahangir Siddiqui & Co. Limited None 282-Noor Manzil, D' Cruz Road, Garden East Karachi 4. Mr. Kamran Jafar, Director Business Executive Aptt #1402, Block D, Creek Vistas Aptts, DHA Phase-8, Karachi None 5. Mr. Ahsen Ahmed, Director Business Executive House No # 44, Street # 7, Khayaban-e-Momin, Phase V, DHA, Karachi 6. Mr. Asif Raza Sena, Director House 73/II, Khayaban-e-Shahbaz, Phase 6, DHA Karachi Director (i) (ii) Director (i) (ii) Abid Industries Sindh Industries Askari Bank Limited Swaat Trust Two New Directors are awaiting final approval of appointment from SECP

19 B - Board of Directors of JS Investments - Profiles Dr. Ali Akhtar Ali (Director) Dr. Ali is currently serving as the Chief Executive Officer at JS Investments Limited. He has over 13 years of active experience in both Fixed Income and Equity markets of Pakistan. He earned his MBBS from Baqai Medical College and MBA with majors in Finance from PAF-KIET. Prior to becoming Chief Executive Officer, Dr Ali was serving in JS Investments as Chief Investment Officer for about 3 years. He joined JS Investments as Senior Vice President in Investments. Before joining JS Investments Limited he remained associated with KASB Capital Ltd. for 2 years as Chief Dealer in the Treasury Department. He was then deputed as the Head of Money Market, Forex and Financial Advisory at KASB Securities. Prior to KASB Capital he worked with JS Investments Limited from 2006 till 2008 in the capacity of Assistant Vice President, Investments Department. He also worked two and a half years ( ) at Jahangir Siddiqui Capital Markets as Senior Dealer Fixed Income Desk and was later promoted to the position of Head of Fixed Income. He also served 3 years ( ) at BMA Capital Management as a Senior Dealer on the Fixed Income Desk. Mr. Suleman Lalani (Director) Mr. Suleman Lalani joined Jahangir Siddiqui & Co. Ltd. ("JSCL") on March 01, 2012 as Chief Executive Officer. Prior to joining JSCL he was Executive Director Finance & Operations and Company Secretary of JS Investments Limited where he served as Chief Financial Officer and Company Secretary for seven years. Mr. Lalani started his career with JSCL in 1992 where he worked for over eight years. In year 2000 he was promoted to the position of Chief Operating Officer of Jahangir Siddiqui Investment Bank Limited, a subsidiary of JSCL. In January 2002, he joined The First Micro Finance Bank Limited as its Chief Financial Officer and Company Secretary. Mr. Lalani is a Fellow member of the Institute of Chartered Accountants of Pakistan and has 20 years of experience in the financial services sector. He has also completed the Board Development Series Certificate Program conducted by the Pakistan Institute of Corporate Governance. Address: 6th Floor, Faysal House, Shahra-e-Faisal Karachi Mr. Muhammad Raza Dyer (Director) Mr. Muhammad Raza Dyer is serving as Head of Operations at JS Bank Limited and has 28 years of diversified experience in commercial banking operations. He started his professional career in 1985 from Bank of America in Visa Card Department. Thereafter, he worked for Mashreq Bank PSC in Foreign Trade, Treasury Back Officer and Branch Operations. He worked for three years in Crescent Commercial Bank Ltd., as Head of Operations - South Region. Prior to joining JS Bank limited, he was providing his services to Arif Habib Bank as Head of Country Operations. Address: JS Bank Limited, Shaheen Branch, Ziauddin Road, Karachi. Mr. Kamran Jafar (Director) A seasoned Banker with seventeen years of a proven track record in Banking, Mr. Kamran Jafar began his career with JS Bank Limited in February 2008 and is currently heading the Corporate and Retail Banking functions of the Bank. He has since then been the driving force of the effort to ensure that the Corporate and Retail Banking Group continues with its expansion and successful drive towards countrywide profitability of the Bank. Mr. Jafar holds diversified experience in number of banking functions such as Retail, Corporate, Branch Banking etc and also has a sound knowledge of Banking Operations including Branch Operations, Credit Administration and Trade Finance. Prior to joining JS Bank he has worked with a number of prominent banks including PICIC Commercial Bank, MyBank and the AlBaraka Islamic Bank in a variety of roles. Kamran is a graduate in business administration from the University of Houston, University Park,