Vision and Mission Statement Organization... Directors' Report to the Unit Holders... Trustee Report to the Unit Holders...

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2 CONTENTS Vision and Mission Statement Organization... Directors' Report to the Unit Holders... Trustee Report to the Unit Holders Report on Review of Condensed Interim Financial Information to the Unit Holders Condensed Interim Statement of Assets and Liabilities... Condensed Interim Income Statement... Condensed Interim Statement of Comprehensive Income... Condensed Interim Statement of Cash Flows Condensed Interim Statement of Movement in Unit Holders' Fund Condensed Interim Distribution Statement Notes to the Condensed Interim Financial Information

3 VISION To be recognized as a responsible asset manager respected for continuingly realizing goals of its investors. MISSION To build JS Investments into a top ranking Asset Management Company; founded on sound values; powered by refined knowhow; supported by a committed team operating within an accountable framework of social, ethical and corporate responsibility - a strong and reliable institution for its shareholders to own; an efficient service provider and value creator for clients; an exciting and fulfilling work place for employees; and a participant worth reckoning for competitors. BROAD POLICY OBJECTIVES Value creation for clients on a sustainable basis Maintain high standards of ethical behaviors and fiduciary responsibility Manage Investments with Prudence and with the aim of providing consistent returns better than that of peers Take Products and Services to the People, Create awareness on understanding financial goals, risks and rewards Professional Excellence - Adapt, Evolve and Continuously Improve Maintain highly effective controls through strong compliance and risk management A talented, diligent and diverse HR 02

4 ORGANIZATION Management Company JS Investments Limited 7th Floor, The Forum, G-20 Khayaban-e-Jami, Block-9, Clifton Karachi Tel: (92-21) Fax: (92-21) Website: Board of Directors Nazar Mohammad Shaikh Chairman Ali Akhtar Ali Chief Executive Officer Suleman Lalani Asif Reza Sana Ahsen Ahmed Kamran Jafar Muhammad Khalil Ur Rehman Muhammad Raza Dyer Audit Committee Nazar Mohammad Shaikh Chairman Munawar Alam Siddiqui Member Lt.General (R) Masood Parwaiz Member Chief Financial Officer & Company Secretary Muhammad Khawar Iqbal Trustee MCB Financial Services Ltd. 3rd Floor, Adamjee House I.I.Chundrigar Road, Karachi Auditors KPMG Taseer Hadi & Co. Chartered Accountants Legal Adviser Registrar Bawaney & Partners Technology Trade (Private) Limited 241-C, Block 2, P.E.C.H.S, Karachi Tel: (92-21) Fax: (92-21)

5 DIRECTORS REPORT TO THE UNIT HOLDERS The Board of Directors of JS Investments Limited has pleasure in presenting to you the un-audited Financial Statements of JS Islamic Government Securities Fund (the Fund) for the six months period ended December 31,. Money Market Review During 1HFY16, the State Bank of Pakistan (SBP) decreased its policy rate by 50bps from 6.50% to 6.00%. Average CPI inflation has declined to 2.10% during July-December, meanwhile trend in YoY CPI inflation has reversed; it rose for third consecutive month to 3.20% in December. We expect the inflation has bottomed out and will be in the range of 3.50% % for FY16. The year-on-year growth in broad money (M2) accelerated largely due to substantial increase in Net Foreign Assets (NFA) of the banking system. Some stress in liquidity noticed in Q1-FY16 due to increased government borrowing from the scheduled banks steadily eased in Q2-FY16 owing to improved revenue collection and timely receipt of foreign flows. Financial Institutions aggressively participated in the PIB auctions where the government raised Rs billion in the PIB auction against the target amount of Rs billion during the 1HFY16. During the 2nd quarter, the SBP borrowed funds worth of Rs trillion through T-bill auctions against a target of Rs trillion where the cut off yield for 3 month, 6 month and 12 month T-bill averaged at 6.34%, 6.36% and 6.39% respectively. The average 3M and 6M KIBOR clocked in at 6.50% and 6.52% for 2QFY16 decreasing by 3.40bps and 3.40 bps YoY respectively, as against 9.90% and 9.92% in the same period last year. Review of Fund Performance The Net Asset Value ("NAV") per unit has increased by 3.23% annualized from beginning NAV of PKR per unit as on June 30, to NAV of PKR as on December 31,. The Fund underperformed its benchmark return by 2.68%. The net assets of the Funds were PKR million as on December 31, compared to PKR million as on June 30,. Fund and Asset Manager Rating The Pakistan Credit Rating Agency (PACRA) reaffirmed the stability rating of "AA- (f)" (Double A Minus - Fund Rating) to the Fund. The fund's rating denotes a strong capacity to maintain high degree of stability in returns and possesses low exposure to risks. JCR-VIS Credit Rating Company Limited has reaffirmed Management Quality Rating of "AM2- "(AM-Two Minus) with a Stable outlook to JS Investments Limited. The rating denotes high management quality of the Management Company. Acknowledgment We wish to express our gratitude to the employees of the Management Company and the Trustee for their dedication and hard work and the participants for their confidence in the Management. Ali Akhtar Ali Karachi: February 17, 2016 Chief Executive Officer 04

6 REPORT OF THE TRUSTEE TO THE UNIT HOLDERS Report of the Trustee Pursuant to Regulation 41(h) of the Non-Banking Finance Companies and Notified Entities Regulations, 2008 JS Islamic Government Securities Fund, an open end scheme established under a Trust Deed dated January 22, 2013 executed between JS Investments Limited, as the Management Company and MCB Financial Services Limited, as the Trustee. 1. JS Investments Limited, the Management Company of JS Islamic Government Securities Fund, has, in all material respects, managed JS Islamic Government Securities Fund during the period ended 31st December in accordance with the provisions of the following: (i) (ii) (iii) Investment limitations imposed on the Asset Management Company and the Trustee under the trust deed and other applicable laws; the valuation or pricing is carried out in accordance with the deed and any regulatory requirement; the creation and cancellation of units are carried out in accordance with the deed; (iv) and any regulatory requirement Karachi: February 9, 2016 Khawaja Anwar Hussain Chief Executive Officer MCB Financial Services Limited 05

7 Report on review of Condensed Interim Financial Information to the Unit Holders Introduction We have reviewed the accompanying condensed interim statement of assets and liabilities of JS Islamic Government Securities Fund ("the Fund") as at, the related condensed interim income statement, condensed interim statement of comprehensive income, condensed interim cash flow statement, condensed interim statement of movement in unit holders' fund, condensed interim distribution statement and notes to the condensed interim financial information for the six months period then ended (here-in-after referred to as the "interim financial information"). Management is responsible for the preparation and presentation of this interim financial information in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Other matters The figures of the condensed interim income statement and condensed interim statement of comprehensive income for the three months period ended, have not been reviewed and we do not express a conclusion on them. Karachi: February 17, 2016 KPMG Taseer Hadi & Co. Chartered Accountants Amyn Pirani 06

8 CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES AS AT 31 DECEMBER Note 30 June Rupees (Unaudited) (Audited) Assets Bank balances 6 16,600,824 41,144,292 Investments 7 109,837, ,596,630 Deferred formation cost 1,632,041 1,970,969 Accrued mark-up income on bank balances and held for trading investments 823,697 1,684,387 Prepayments 8 78,487 - Total assets 128,972, ,396,278 Liabilities Payable to the Management Company 84, ,358 Remuneration payable to the Trustee 42,350 41,096 Annual fee payable to the Securities and Exchange Commission of Pakistan 56, ,754 Accrued expenses and other liabilities 9 2,164,275 2,243,140 Total liabilities 2,347,230 2,553,348 Contingency and Commitment 11 Net assets Rupees 126,625, ,842,930 Unit holders' fund Rupees 126,625, ,842,930 Number of units in issue (face value of Rs. 100 per unit) Number 1,243,600 1,775,050 Net asset value per unit Rupees The annexed notes from 1 to 16 form an integral part of these condensed interim financial information. Ali Akhtar Ali Chief Executive Officer For JS Investments Limited (Management Company) Nazar Mohammad Shaikh Director 07

9 CONDENSED INTERIM INCOME STATEMENT (UNAUDITED) FOR THE SIX MONTHS AND THREE MONTHS PERIOD ENDED 31 DECEMBER Income Markup income on bank balances and held for Six months period ended 2014 Three months period ended 2014 trading investments 12 4,473,861 10,887,866 1,675,788 5,313,955 Loss on sale of held for trading investments - net (587,695) (2,007,478) (432,695) (894,397) Unrealised gain / (loss) on revaluation of held for trading investments - net 621,412 (1,046,635) 734, ,196 4,507,578 7,833,753 1,977,703 4,529,754 Element of (loss) / gain and capital (losses) / gains included in prices of units issued less those of units redeemed - net (527,080) (387,266) 22,674 (259,028) 3,980,498 7,446,487 2,000,377 4,270,726 Expenses Remuneration of the Management Company 562, , , ,374 Sindh sales tax on Management Company's remuneration , ,269 37,575 74,190 Federal excise duty on Management Company's remuneration , ,613 37,686 68,219 Remuneration of the Trustee 251, , , ,027 Sindh sales tax on Trustee remuneration 35,174-17,578 - Annual fee to the Securities and Exchange Commission of Pakistan 56,244 90,370 23,555 42,629 Securities transaction cost 9,150 44,010 1,000 14,168 Amortisation of deferred formation cost 338, , , ,654 Listing fee 15,085 15,099 7,544 7,544 Mutual fund rating fee 83,841 88,209 39,347 44,141 Bank and settlement charges 3,886 8,477 2,257 4,849 Auditors' remuneration 267, , , ,127 Printing, stationary and postage 46,896 10,134 21,905 (17,736) Legal and professional charges 100, Provision for Workers' Welfare Fund ,179-63,471 1,951,576 2,439, ,406 1,160,657 Net income for the period before taxation 2,028,922 5,006,780 1,160,971 3,110,069 Taxation Net income for the period after taxation Rupees 2,028,922 5,006,780 1,160,971 3,110,069 The annexed notes from 1 to 16 form an integral part of these condensed interim financial information. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Nazar Mohammad Shaikh Director 08

10 CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE SIX MONTHS AND THREE MONTHS PERIOD ENDED 31 DECEMBER Note Six months period ended 2014 Three months period ended 2014 Net income for the period after taxation 2,028,922 5,006,780 1,160,971 3,110,069 Other comprehensive income for the period Total comprehensive income for the period Rupees 2,028,922 5,006,780 1,160,971 3,110,069 The annexed notes from 1 to 16 form an integral part of these condensed interim financial information. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Nazar Mohammad Shaikh Director 09

11 CONDENSED INTERIM STATEMENT OF CASH FLOW (UNAUDITED) FOR THE SIX MONTHS PERIOD ENDED 31 DECEMBER CASH FLOWS FROM OPERATING ACTIVITIES Six months period ended 2014 Net income for the period after taxation 2,028,922 5,006,780 Adjustments for: Markup income on bank balances and held for trading investments (4,473,861) (10,887,866) Loss on sale of held for trading investments - net 587,695 2,007,478 Unrealised (gain) / loss on revaluation of held for trading investments - net (621,412) 1,046,635 Element of loss and capital losses included in prices of units issued less those in units redeemed - net 527, ,266 (1,951,576) (2,439,707) Decrease / (increase) in assets Sale of held for trading investments 109,702, ,172,981 Purchase of held for trading investments (83,910,054) (135,214,490) Deferred formation cost 338, ,682 Markup income received on bank balances and held for trading investments 5,334,551 13,151,489 Prepayments (78,487) 73,307 31,387,439 26,563,969 (Decrease) / increase in liabilities Payable to the Management Company (24,997) (192,828) Remuneration payable to the Trustee 1,254 1,047 Annual fee payable to the Securities and Exchange Commission of Pakistan (103,510) (236,014) Payable against redemption of units - (4,511,517) Accrued expenses and other liabilities (78,865) 291,108 (206,118) (4,648,204) Net cash flows from operating activities 29,229,745 19,476,058 CASH FLOWS FROM FINANCING ACTIVITIES Amount received on issuance of units 69,102, ,643,220 Amount paid on redemption of units (122,875,772) (255,285,720) Net cash flows from financing activities (53,773,213) (30,642,500) Net decrease in cash and cash equivalents during the period (24,543,468) (11,166,442) Cash and cash equivalent at beginning of the period 41,144,292 68,696,399 Cash and cash equivalent at end of the period Rupees 16,600,824 57,529,957 The annexed notes from 1 to 16 form an integral part of these condensed interim financial information. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Nazar Mohammad Shaikh Director 10

12 CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUND (UNAUDITED) FOR THE SIX MONTHS PERIOD ENDED 31 DECEMBER Six months period ended 2014 Net assets as at beginning of the period 177,842, ,415,652 Amount received on issuance of 687,452 (2014: 2,250,923) units 69,102, ,643,220 Amount paid on redemption of 1,218,902 (2014: 2,554,721) units (122,875,772) (255,285,720) (53,773,213) (30,642,500) Element of loss and capital losses included in prices of units issued less those of units redeemed - net 527, ,266 Total comprehensive income for the period (net income for the period after taxation) 2,028,922 5,006,780 Net assets as at end of the period Rupees 126,625, ,167,198 Ex-distribution net asset value per unit as at beginning of the period Rupees Net asset value per unit at end of the period as at end of the period Rupees The annexed notes from 1 to 16 form an integral part of these condensed interim financial information. 11

13 CONDENSED INTERIM DISTRIBUTION STATEMENT (UNAUDITED) FOR THE SIX MONTHS PERIOD ENDED 31 DECEMBER Six months period ended Undistributed income as at beginning of the period Realised gain 3,406, ,283 - Unrealised gain 498,156 2,314,579 Undistributed income as at beginning of the period 3,904,988 3,053,862 Net income for the period after taxation 2,028,922 5,006,780 Undistributed income as at end of the period Rupees 5,933,910 8,060,642 Undistributed income carried as at end of the period - Realized gains 5,585,447 9,053,054 - Unrealized gain / (loss) 348,463 (992,412) Rupees 5,933,910 8,060,642 The annexed notes from 1 to 16 form an integral part of these condensed interim financial information. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Nazar Mohammad Shaikh Director 12

14 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENT (UNAUDITED) FOR THE SIX MONTHS PERIOD ENDED 31 DECEMBER 1. LEGAL STATUS AND NATURE OF BUSINESS JS Islamic Government Securities Fund ("the Fund") was established under a Trust Deed executed between JS Investments Limited as Management Company, a company incorporated under the Companies Ordinance, 1984 and the MCB Financial Services Limited (MCBFSL) as a Trustee, which is a wholly owned subsidiary of MCB Bank Limited. The Trust Deed was executed on 22 January 2013 after approval by the Securities and Exchange Commission of Pakistan (SECP) on 21 January 2013 under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (the Rules). The Fund has been established under the rules of business applicable to open end mutual funds. The Fund is an open end mutual Fund and is listed on the Pakistan Stock Exchange Limited. The Fund offers units for public subscription on a continuous basis. These can be redeemed by surrendering them to the Fund at the option of the unit holder. The Scheme is a Shariah Compliant Sovereign Income Scheme as per the criteria for the categorization" of open-end collective investment schemes specified by the Securities and Exchange Commission of Pakistan. The objective of the Scheme is to generate a stable rate of current halal income while aiming capital preservation in medium to long term by investing primarily in Shariah Compliant Government Securities. The Scheme is required to invest minimum 70% of its assets in Shariah Compliant Sovereign debt securities (i.e., monetary obligations of the Federal Government or a Provincial Government or of a corporation wholly owned or controlled, directly or indirectly, by the Federal Government or Provincial Government and preferably unconditionally guaranteed by the Federal or Provincial Government for payment of principal and profit) at all times while the remaining assets shall be invested in bank deposits with Islamic banks / Islamic windows of commercial banks in order to generate higher risk adjusted returns. The Management Company of the Fund has obtained license to act as an Asset Management Company under the Rules from SECP. The registered office of JS Investments Limited is situated at 7th Floor, The Forum, G-20 Khayaban-e-Jami, Block-9, Clifton, Karachi. Title to the assets of the Fund is held in the name of MCB Financial Services Limited as a Trustee of the Fund. Transactions are undertaken by the Fund in accordance with the guidelines issued by the Shariah Advisory Council. 2. BASIS OF PREPARATION 2.1 Statement of compliance JS Islamic Government Securities Fund This condensed interim financial information has been prepared in accordance with the requirements of the International Accounting Standard 34 - Interim Financial Reporting, provisions of and directives issued under the Companies Ordinance, 1984, Non Banking Finance Companies (Establishment and Regulation) Rules, 2003 (the Rules), Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the Regulations) and directives issued by the Securities and Exchange Commission of Pakistan (SECP). In case the requirements differ, the requirements of the Rules, the Regulations and the directives issued by the SECP shall prevail. 2.2 These condensed interim financial information do not include all the information and disclosures required in the annual financial statements and should therefore be read in conjunction with the financial statements of the Fund as at 30 June. However, selected explanatory notes are included to explain events and transactions that are significant. 13

15 2.3 These condensed interim financial information are unaudited and are being submitted to the unit holders as required under Regulation 38(2)(f) of the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the NBFC Regulations). However, a limited scope review has been carried out by the auditors in accordance with the requirements of clause (xix) of the Code of Corporate Governance issued by the Securities and Exchange Commission of Pakistan. 2.4 Functional and presentation currency These condensed interim financial information are presented in Pak Rupees, which is the Fund's functional and presentation currency. All financial information presented in Pak Rupees has been rounded off to the nearest of rupees. 3. SIGNIFICANT ACCOUNTING POLICIES Except for note 3.1, the accounting policies and methods of computation adopted in the preparation of this condensed interim financial information are the same as those applied in preparing the financial statements as at and for the year ended 30 June. IFRS 13 'Fair Value Measurement' became effective for financial periods beginning on or after 1 January. The effect of IFRS 13 'Fair Value Measurement' are disclosed in notes 3.1 and 13 to these condensed interim financial information. 3.1 IFRS 13 Fair Value Measurement, consolidates the guidance on how to measure fair value, which was spread across various IFRS, into one comprehensive standard. It introduces the use of an exit price, as well as extensive disclosure requirements, particularly the inclusion of non-financial instruments into the fair value hierarchy. The application of IFRS 13 does not have an impact on the financial statements of the Fund's, except certain additional disclosures. 4. ESTIMATES AND JUDGEMENTS The preparation of condensed interim financial information requires management to make judgements, estimates and assumption that affect the application of accounting policies and reported amount of assets and liabilities, income and expenses. Actual result may differ from these estimates. The significant judgements made by management in applying the accounting policies and the key sources of estimation uncertainty were the same as those that applied to financial statements as at 30 June. 5. FINANCIAL RISK MANAGEMENT The Fund's financial risk management objectives and policies are consistent with these disclosed in the financial statements as at 30 June. 6. BANK BALANCES Note (Un-audited) 30 June (Audited) Profit and loss sharing accounts ,275,202 40,241,631 Current accounts , ,661 Rupees 16,600,824 41,144, This includes bank balance of Rs. 9,652 (30 June: Rs. 6,637) with JS Bank Limited (a related party) and Rs. 10,000 (30 June: Nil) with Bank Islami Pakistan Limited (a related party). These accounts carry profit at the rate of 6.5% (30 June: 7%) and 6.25% (30 June: Nil) per annum respectively. Other profit and loss sharing accounts carry profit rates ranging from 4.5% to 6.5% (30 June: 4% to 7.5%) per annum. 6.2 This represents balance with JS Bank Limited (a related party). 7. INVESTMENTS Note (Un-audited) 30 June (Audited) Governments securities GOP Ijara Sukuk Bonds - held for trading 7.1 Rupees 109,837, ,596,630 14

16 7.1 GOP Ijara Sukuk Bonds - held for trading Holding at the beginning of the period Acquired during the period Number of certificates Matured / Disposed during the period Holding at the end of the period Carrying value before revaluation as at period Market value / carrying value as at (after revaluation) 3 - Years GOP Ijara...Rupees... Sukuk Bonds (face value: Rs. 5,000) 26,920 21,300 26,400 21, ,216, ,837, Cost of held for trading investment as at 109,489,437 % of net assets The above investments in GOP Ijara Sukuk Bonds have been valued at the PKISRV rates as at quoted on the MUFAP page. These securities are held in the IPS account of Soneri Bank Limited maintained with the State Bank of Pakistan. These carry profit rates of 4.75% to 6.15% (30 June: 4% to 7.5%) per annum and will mature during the period from 28 March 2016 to 18 December 2018 (30 June: 21 November to 28 March 2016). 8. PREPAYMENTS (Un-audited) 30 June (Audited) Prepaid rating fee 63,572 - Prepaid annual listing fee 14,915 - Rupees 78, ACCRUED EXPENSES AND OTHER LIABILITIES Note (Un-audited) 30 June (Audited) Provision for Workers' Welfare Fund , ,093 Federal excise duty payable on Management Company's remuneration , ,029 Auditors' remuneration 279, ,725 Sindh sales tax payable on Management Company's remuneration , ,498 Sindh sales tax payable on Trustee remuneration 5,929 - Other liabilities 27, ,303 Withholding tax payable - 97,492 Rupees 2,164,275 2,243, There is no change in the status of petition pending with the Honourable Sindh High Court (SHC) as reported in note 11.1 to the annual financial statements of the Fund for the year ended 30 June. The Fund maintained a provision for WWF as at amounting to Rs million in these condensed interim financial information (30 June: Rs million). Had the provision not been made, Net Asset Value per unit of the Fund as at would have been higher by 0.79 (30 June: 0.55) per unit. Furthermore, vide the Finance Act,, the mutual funds have been excluded from the levy of WWF. Accordingly, the management is of the view that this change is applicable from 01 July. However, the matter regarding previous years would either need to be clarified by FBR or would be resolved through courts. 15

17 9.2 As per the requirement of the Finance Act, 2013, the Federal Excise Duty (FED) at the rate of 16% on the remuneration of the Management Company has been applied effective from 13 June The Management Company is of the view that since the remuneration is already subject to the provincial sales tax, further levy of FED may result in double taxation, which doesn't appear to be the spirit of the law. A stay order against the collection have been granted by the Honourable High Court of Sindh on a petition filed by the Mutual Funds Association of Pakistan (MUFAP). As a matter of abundant caution, the Management Company has made provision for FED from the aforementioned effective date, of which, FED up to the month of August 2013 was paid by the Fund to the regulatory authorities and thereafter the FED amount has not been paid by them. Had the provision not been made, Net Asset Value per unit of the Fund as at would have been higher by 0.60 (30 June: 0.37) per unit. 9.3 The Sindh Provincial Government has levied Sindh Sales Tax at the rate of 14% (30 June: 15%) on Management Company's remuneration. Above liability includes Rs. 114,637 (30 June: Rs. 102,089) accrued on Federal Excise Duty (FED) on the management remuneration as more fully explained in note 9.2 above. Had the provision on FED not been made, Net Asset Value per unit of the Fund as at would have been higher by 0.09 (30 June: 0.06) per unit. 10. TAXATION The Fund's income is exempt from Income Tax as per clause 99 of Part I of the Second Schedule to the Income Tax Ordinance, 2001 subject to the condition that not less than 90% of the accounting income for the year as reduced by capital gains whether realised or unrealised is distributed amongst the unit holders, provided that for the purpose of determining distribution of not less than 90% of its accounting income for the year, the income distributed through bonus units shall not be taken into account. Furthermore, as per regulation 63 of the Non- Banking Finance Companies and Notified Entities Regulations, 2008, the Fund is required to distribute 90% of the net accounting income other than capital gains to the unit holders. The Fund is also exempt from the provisions of Section 113 (minimum tax) under Clause 11A of Part IV of the Second Schedule to the Income Tax Ordinance, The management intends to distribute at least 90% of the income earned during the year by the Fund to the unit holders, if by then it earns profit. 11. CONTINGENCY AND COMMITMENT The Fund had no contingency or commitment at the period end. 12. MARK UP INCOME ON BANK BALANCES AND HELD FOR TRADING INVESTMENTS Six months period ended 2014 Six months period ended 2014 Bank balances 648,543 1,549, , ,254 GOP Ijarah Sukuk Bonds - held for trading 3,825,318 9,338,547 1,409,271 5,207,701 Rupees 4,473,861 10,887,866 1,675,788 5,313, TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS Connected persons / related parties include JS Investment Limited (JSIL) being the Management Company, MCB Financial Services Limited being the trustee, Jahangir Siddiqui and Co. Limited being the holding company of JS Bank Limited (JSBL - which is the holding Company of the Management Company), JS Global Capital Limited (which is a fellow subsidiary of JSBL) and other associated companies of the Management Company and its subsidiary, Key Management Personnel and other funds being managed by the Management Company and includes entities holding 10% or more in the units of the Fund. It also includes staff retirement funds of the above related parties / connected persons. 16

18 13.1 Details of balances with related parties / connected persons as at period/year end 30 June (Unaudited) (Audited) Rupees JS Investments Limited Remuneration payable to the Management Company Rupees 84, ,358 Sindh sales tax payable on Management Company's remuneration * Rupees 125, ,498 Federal excise duty payable on Management Company's remuneration * Rupees 744, ,029 MCB Financial Services Limited Remuneration payable to the Trustee Rupees 42,350 41,096 Sindh sales tax payable on Trustee remuneration ** Rupees 5,929 - JS Bank Limited Units outstanding: 1,011,315 (30 June : 1,011,315) [81.32% of total units in issue as at the period end (30 June : 56.97% of total units in issue as at year end)] Rupees 102,972, ,323,612 Bank balance Rupees 335, ,661 JS Global Capital Limited Brokerage Payable Rupees 1,000 - Bank Islami Pakistan Limited Bank balance Rupees 10,000 - Accrued markup on bank balances Rupees 20 - * Paid / payable to the Management Company for onwards payment to the Government. ** Paid / payable to the Trustee for onwards payment to the Government. (Unaudited) 30 June (Audited) Rupees EFU General Insurance Limited Units outstanding: Nil (30 June : 499,550) Rupees - 50,049,955 Key Management Personnel of the Management Company Units outstanding: 16,622 (30 June : 12,168) Rupees 1,692,495 1,219,112 17

19 13.2 Details of transactions with related parties / connected persons during the period (Unaudited) JS Investments Limited Remuneration to the Management Company Rupees 562, ,837 Sindh sales tax on Management Company's remuneration * Rupees 90, ,269 Federal excise duty on Management Company's remuneration * Rupees 89, ,613 Issue of units: Nil (2014: 4,997) Rupees - 505,050 Expenses incurred Rupees 143, ,840 Sales load Rupees MCB Financial Services Limited Remuneration of the Trustee Rupees 251, ,054 Sindh sales tax on Trustee remuneration ** Rupees 35,174 - JS Bank Limited Bank Charges Rupees 2,330 2,082 Bank Islami Pakistan Limited Markup income on bank balance Rupees 20 - JS Global Capital Limited Brokerage expense Rupees 3, ABAMCO LTD Staff Provident Fund Issue of units: Nil (2014: 4,998) Rupees - 505,350 Redemption of units: Nil (2014: 31,991) Rupees - 3,229,362 EFU Life Assurance Limited Issue of units: Nil (2014: 1,185,917) Rupees - 118,496,852 Redemption of units: Nil (2014: 755,239) Rupees - 75,539,027 * Paid / payable to the Management Company for onwards payment to the Government. ** Paid / payable to the Trustee for onwards payment to the Government. Six months period ended 2014 Six months period ended 2014 (Unaudited) EFU General Insurance Limited Redemption of units: 499,550 (2014: Nil) Rupees 50,414,627 - Key Management Personnel Redemption of units: Nil (2014: 2,172) Rupees - 220, Remuneration payable to the Management Company and the Trustee have been determined in accordance with the provisions of NBFC Regulations and the Trust Deed respectively Purchase and redemption of the Fund's unit by related parties / connected persons are recorded at the applicable net asset value per unit. Other transactions are at agreed rates. 18

20 14. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Underlying the definition of fair value is the presumption that the Fund is a going concern without any intention or requirement to curtail materially the scale of its operations or to undertake a transaction on adverse terms. The fair value of financial assets and liabilities traded in active markets i.e. listed equity shares are based on the quoted market prices at the close of trading on the period end date. The quoted market prices used for financial assets held by the Fund is current bid price. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. IFRS 13, 'Fair Value Measurements' requires the Fund to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date (level 1). - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (level 2). - Unobservable inputs for the asset or liability (level 3). The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. Carrying amount Fair value On-balance sheet financial instrument Note Fair value through income statement Loans and receivables Other financial liabilities Total Level 2 Total Financial assets measured at fair value Investments - Government securities 7 109,837, ,837, ,837, ,837,900 Financial assets not measured at fair value 14.1 Bank balances 6-16,600,824-16,600, Accrued mark-up income on bank balances and held for trading investments - 823, , ,424,521-17,424, Financial liabilities not measured at fair value 14.1 Payable to the Management Company ,361 84, Remuneration payable to the Trustee ,350 42, Annual fee payable to the Securities and Exchange Commission of Pakistan (SECP) ,244 56, Accrued expenses and other liabilities , , , ,

21 On-balance sheet financial instruments 30 June Note Fair value through income statement Carrying amount Loans and receivables Other financial liabilities Total Level 2 Fair value Total Financial assets measured at fair value Investments - Government securities 7 135,596, ,596, ,596, ,596,630 Financial assets not measured at fair value 14.1 Bank balances 6-41,144,292-41,144, Accrued mark-up income on bank balances and held for trading investments - 1,684,387-1,684, ,828,679-42,828, Financial liabilities not measured at fair value 14.1 Payable to the Management Company , , Remuneration payable to the Trustee ,096 41, Annual fee payable to the Securities and Exchange Commission of Pakistan (SECP) , , Accrued expenses and other liabilities , , , , The Fund has not disclosed the fair values for these financial assets and financial liabilities, as these are either short term in nature or reprice periodically. Therefore, their carrying amounts are reasonable approximation of fair value. 15. GENERAL These condensed interim financial information are unaudited and have been reviewed by the auditors. Furthermore, the figures for the three months period ended in these condensed interim financial information, where appearing, have not been reviewed by the auditors. 16. DATE OF AUTHORIZATION OF ISSUE These condensed interim financial information were authorized for issue on February 17, 2016 by the Board of Directors of the Management Company. Ali Akhtar Ali Chief Executive Officer For JS Investments Limited (Management Company) Nazar Mohammad Shaikh Director 20

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