Condensed Interim Financial Information for the Nine Months & Quarter Ended March 31, 2014

Transcription

1 Condensed Interim Financial Information for the Nine Months & Quarter Ended March 31, 2014

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4 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 Distribution Statement Condensed Interim Statement of Cash Flows Condensed Interim Statement of Movement in Unit Holders Fund Notes to the Condensed Interim Financial Information

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6 Faysal Asset Management Faysal Income & Growth Fund

7 REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANY The Board of Directors of the Faysal Asset Management Limited, the management company of the Faysal Income & Growth Fund (FIGF), is pleased to present the un-audited condensed interim financial information of FIGF for the nine months and quarter ended March 31, FINANCIAL HIGHLIGHTS Quarter Ended March Nine Months Ended March Total Income Operating Expenses (3.478) (3.976) (10.486) (11.079) Profit Before Tax Taxation Profit After Tax NAV per unit (Rs. Per unit) MONEY MARKET REVIEW: During the quarter under review, the State Bank of Pakistan held two monetary policies (Jan 14 and Mar 14) in which the key policy rate remained unchanged at 10%. Over the period, headline inflation reduced substantially to average at 8.1% as opposed to average of 9.7% for previous quarter. Notwithstanding the respite available in the form of positive real interest rates, the State Bank of Pakistan exercised monetary caution on the back of IMF guidelines and the need to stabilize Pak Rupee. As a result of disinflation and improved macroeconomic outlook, however, market participants shifted from short-tenor T-bills towards longer-tenor PIBs in what was observed as a record-breaking series of auction participations. The SBP conducted three PIB auctions over the quarter, with a target of PKR 180bn. Compared to the target, market participation amounted to a phenomenal PKR 1,026bn, out of which the Central Bank accepted PKR 978bn. Resultantly, the market was left illiquid over majority of the quarter and the Central Bank had to resort to frequent open market operations to keep the fixed income market sufficiently liquid. Over the quarter under review, the SBP conducted 4 mop-ups and 11 injections via OMO. Total participation of PKR 277bn was observed in mop-ups, against which the Central Bank mopped-up PKR 198bn. On the contrary, a much larger participation of PKR 1,679bn was witnessed in injections, against which the SBP actually injected PKR 1,131bn. With higher participation in bond auctions, it is evident that market confidence in future economic and monetary wellbeing has increased. With higher participation from both retail and institutional clients, the bond market is certainly expected to observe significantly higher

8 levels of secondary market activity; which in turn, should aid in price discovery and fine adjustments of the longer-end of the yield curve. FUND PERFORMANCE Faysal Income and Growth Fund generated a net return of 14.13% in the third quarter of fiscal year 2014, as compared to the benchmark of 10.15%. Due to the beginning inflation numbers and flattening yield curve, exposure was increased towards PIBs to realize higher yields without incurring additional risk. The fund also initiated investment in Margin Trading System to further increase the return of the fund. Going forward your fund is adequately aligned to capitalize on lower inflation reading and provide a superior risk-adjusted return. FUND RATINGS JCR-VIS has assigned fund stability rating of A+(f) for Faysal Income & Growth Fund (FIGF). The fund stability rating is based on the investment policy and asset allocation mix of the portfolio. A+(f) denotes moderate degree of stability in Net Asset Value. INCOME DISTRIBUTION The Board of directors has approved fund interim distribution at the rate of 0.20% (i.e Rs per unit of par value of Rs.100 each) for the quarter ended March 31, ACKNOWLEDGEMENT The Board of Directors of the Management Company thanks 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 and the unit holders for their confidence in the Management. For and on behalf of the Board Karachi: April 28, 2014 Enamullah Khan Chief Executive Officer

9 8 Condensed Interim Statement of Assets and Liabilities As at March 31, 2014 ASSETS Note (Un-Audited) (Audited) March 31, June 30, (Rupees) Bank balances and term deposit receipts 4 114,753,998 83,766,116 Investments 5 301,497, ,914,442 Receivable against Margin Trading System (MTS) 46,563,104 - Prepayments, deposits and other receivables 6 51,568,673 16,834,050 Total assets 514,383, ,514,608 LIABILITIES Payable to the Management Company 7 784, ,420 Remuneration payable to the Trustee 71,781 93,142 Accrued and other liabilities 8 8,810,823 7,839,039 Total liabilities 9,666,791 8,897,601 Net assets 504,716, ,617,007 Unit holders' fund (as per statement attached) 504,716, ,617,007 Contingencies and commitments (Number of units) Number of Units in issue 4,673,951 5,340, (Rupees) Net assets value per unit The annexed notes from 1 to 14 form an integral part of this condensed interim financial information.

10 9 Condensed Interim Income Statement For the Nine Months and Quarter Ended March 31, 2014 (Un-Audited) Income Nine months ended Quarter ended March 31, March 31, March 31, March 31, Note (Rupees) (Rupees) Profit earned on debt and government securities 30,536,150 42,411,356 10,072,290 14,964,308 Income from Margin Trading System (MTS) 139, ,648 - Return on bank balances and term deposit receipts 7,149,410 4,612,319 2,765,733 1,068,638 Net gain / (loss) on investments classified as 'at fair value through profit or loss' - Net capital gain / (loss) on sale of investments 2,768,329 (488,572) 3,811,223 (41,449) - Net unrealised gain on revaluation of investments 5,012,136 2,111,450 3,533, ,267 - Reversal of provision against debt instruments - 3,706, ,780,465 5,329,567 7,345,080 76,818 Total income 45,605,673 52,353,242 20,322,751 16,109,764 Expenses Remuneration of the Management Company 5,665,840 6,683,498 1,804,196 2,495,661 Sales tax on management fee 1,051,064 1,069, , ,303 Provision for federal excise duty on management fee 907, ,200 - Remuneration of the Trustee 642, , , ,846 Brokerage charges 133, ,299 45,602 30,709 Bank charges 53,433 91,891 22,462 18,892 Auditors' remuneration 420, , , ,192 SECP annual fee 283, ,991 90, ,784 Legal and professional charges 27,780 45,040-14,794 Fees and subscription 202, ,165 68,889 59,178 Settlement charges and federal excise duty 171, ,810 77,749 82,798 Printing charges and other expenses 221, ,955 71,601 73,234 Provision for Workers' Welfare Fund , , , ,047 Total expenses 10,486,443 11,078,634 3,478,402 3,976,438 Net income from operating activities 35,119,230 41,274,608 16,844,349 12,133,326 Element of (loss) / income and capital (losses) / gains included in prices of units sold less those in units redeemed - net (531,057) 3,610,946 (108,828) 1,196,985 Net income for the period before taxation 34,588,173 44,885,554 16,735,521 13,330,311 Taxation Net income for the period after taxation 34,588,173 44,885,554 16,735,521 13,330,311 Other comprehensive income for the period Total comprehensive income for the period 34,588,173 44,885,554 16,735,521 13,330,311 The annexed notes from 1 to 14 form an integral part of this condensed interim financial information.

11 10 Condensed Interim Distribution Statement For the Nine Months Ended March 31, 2014 (Un-Audited) March 31, March 31, (Rupees) Undistributed income brought forward 31,730,824 36,815,085 [includes unrealised loss on investments of Rs.44,928 (2012: unrealised loss of Rs.3,497,242)] Final bonus distribution for the year ended June 30, Rs.1.0 (June 30, 2012: Rs. 3.3) per unit declared for distribution on July 5, 2013 (4,667,091) (10,162,152) Final cash distribution for the year ended June 30, Rs.1.0 (June 30, 2012: Rs.3.3) per unit declared for distribution on July 5, 2013 (673,116) (6,183,828) Interim bonus distribution for the month of July Rs.0.40 (2012: Rs.Nil) per unit declared for distribution on August 01, 2013 (1,851,117) - Interim cash distribution for the month of July Rs.0.40 (2012: Nil) per unit declared for distribution on August 01, 2013 (268,990) - Interim bonus distribution for the month of August Rs.0.35 (2012: Rs.Nil) per unit declared for distribution on September 02, 2013 (1,442,351) - Interim cash distribution for the month of August Rs.0.35 (2012: Rs.Nil) per unit declared for distribution on September 02, 2013 (235,591) - Interim bonus distribution for the quarter ended September 30, Re.0.80 (2012: Rs.2.30) per unit declared for distribution on October 29, 2013 (3,188,054) (7,452,849) Interim cash distribution for the quarter ended September 30, Re.0.80 (2012: Rs.2.30) per unit declared for distribution on October 29, 2013 (493,520) (4,309,941) Interim bonus distribution for the month of October 31, Re.0.45 (2012: Rs.Nil) per unit declared for distribution on November 01, 2013 (1,800,833) - Interim cash distribution for the month of October 31, Re.0.45 (2012: Rs.Nil) per unit declared for distribution on November 01, 2013 (277,605) - Interim bonus distribution for the month of November 30, Re.0.55 (2012: Rs.Nil) per unit declared for distribution on December 02, 2013 (2,172,674) - Interim cash distribution for the month of November 30, Re.0.55 (2012: Rs.Nil) per unit declared for distribution on December 02, 2013 (339,295) - Interim bonus distribution for the quarter ended December 31, Re (2012: Rs. 2.40) per unit declared for distribution on February 24, 2014 (3,080,894) (10,671,634) Interim cash distribution for the quarter ended December 31, Re (2012: Rs. 2.40) per unit declared for distribution on February 24, 2014 (478,529) (4,497,330) Interim bonus distribution for the month of January 31, Re (2013: Rs. Nil) per unit declared for distribution on February 03, 2014 (2,133,177) Interim cash distribution for the month of January 31, Re (2013: Rs. Nil) per unit declared for distribution on February 03, 2014 (328,988) Interim bonus distribution for the month of February 28, Re (2013: Rs. Nil) per unit declared for distribution on March 03, 2014 (1,873,774) Interim cash distribution for the month of February 28, Re (2013: Rs. Nil) per unit declared for distribution on March 03, 2014 (287,117) Net income for the period after taxation 34,588,173 44,885,554 Undistributed income carried forward [includes unrealised gain on investments of Rs. 4,776,515 (2013: unrealised gain on investments of Rs.2,111,450)] 40,726,281 38,422,905 The annexed notes from 1 to 14 form an integral part of this condensed interim financial information.

12 11 Condensed Interim Statement of Cash Flows For the Nine Months Ended March 31, 2014 (Un-Audited) CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period before taxation Adjustments for non-cash and other items: Net capital gain / (loss) on sale of investments classified as 'at fair value through profit or loss' Net unrealised gain on revaluation of investments classified as 'at fair value through profit or loss' Reversal of provision against debt instruments Profit earned on debt and government securities Income from Margin Trading System (MTS) Return on bank balances and term deposit receipts Element of loss / (income) and capital losses / (gains) included in prices of units sold less those in units redeemed - net Decreas) / (increase) in assets Prepayments, deposits and other receivables Advance against Pre IPO subscription Increase / (decrease) in liabilities Payable to the Management Company Remuneration payable to the Trustee Accrued and other liabilities Proceed from sale / redemption of investments Payments made against purchase of investments Payments made against Margin Trading System (MTS) Dividend received Profit received on debt and government securities Income received on Margin Trading System (MTS) Return received on bank balances and term deposit receipts Net cash generated from / (used in) operating activities CASH FLOWS FROM FINANCING ACTIVITIES Amount received against issue of units Payments made against redemption of units Dividend paid Net cash (used in) / generated from financing activities Net increase / (decrease) in cash and cash equivalents during the period Cash and cash equivalents as at the beginning of the period Note March 31, March 31, (Rupees) ,588,173 44,885,554 (2,768,329) 488,572 (5,012,136) (2,111,450) - (3,706,689) (30,536,150) (42,411,356) (139,648) (7,149,410) (4,612,319) 531,057 (3,610,946) (10,486,443) (11,078,634) 2,010,067 18,360,513 (37,000,000) - (34,989,933) 18,360,513 (181,233) 122,700 (21,361) 25, , , ,190 1,031,474 (44,707,186) 8,313,353 1,479,706,519 3,014,251,116 (1,299,535,468) (3,215,687,687) (46,563,104) - 45,616,345 32,190,903 2,036,687 27,521-5,888,168 4,959, ,007,353 (140,510,355) 82,788, ,270,239 (175,425,397) (56,207,209) (3,382,751) (14,991,099) (96,019,471) 119,071,931 30,987,882 (21,438,424) 83,766, ,173,710 Cash and cash equivalents as at the end of the period 4 114,753,998 95,735,286 The annexed notes from 1 to 14 form an integral part of this condensed interim financial information.

13 12 Condensed Interim Statement of Movement in Unit Holders Fund For the Nine Months Ended March 31, 2014 (Un-Audited) March 31, March 31, (Rupees) Net asset value per unit at beginning of the period Net asset value per unit at end of the period Net assets at beginning of the period 565,617, ,539,212 Amount received on issue of units * 82,788, ,270,239 Amount paid on redemption of units ** (175,425,397) (56,207,209) (92,636,720) 134,063,030 Element of loss / (income) and capital losses / (gains) included in prices of units sold less those in units redeemed - net 531,057 (3,610,946) Final cash distribution for the year ended June 30, Rs.1.0 (June 30, 2012: Rs.3.3) per unit declared for distribution on July 5, 2013 (673,116) (6,183,828) Interim cash distribution for the month of July Rs.0.40 (2012: Nil) per unit declared for distribution on August 01, 2013 (268,990) - Interim cash distribution for the month of August Rs.0.35 (2012: Rs.Nil) per unit declared for distribution on September 02, 2013 (235,591) - Interim cash distribution for the quarter ended September 30, Re.0.80 (2012: Rs.2.30) per unit declared for distribution on October 29, 2013 (493,520) (4,309,941) Interim cash distribution for the month of October 31, Re.0.45 (2012: Rs.Nil) per unit declared for distribution on November 01, 2013 (277,605) - Interim cash distribution for the month of November 30, Re.0.55 (2012: Rs.Nil) per unit declared for distribution on December 02, 2013 (339,295) - Interim cash distribution for the quarter ended December 31, Re (2012: Rs. 2.40) per unit declared for distribution on February 24, 2014 (478,529) (4,497,330) Interim cash distribution for the month of January 31, Re (2013: Rs. Nil) per unit declared for distribution on February 03, 2014 (328,988) - Interim cash distribution for the month of February 28, Re (2013: Rs. Nil) per unit declared for distribution on March 03, 2014 (287,117) - Net capital gain / (loss) on sale of investments 2,768,329 (488,572) Net unrealised gain on revaluation of investments 5,012,136 2,111,450 Other net income for the period 26,807,708 43,262,676 Other comprehensive income for the period - - Total comprehensive income for the period 34,588,173 44,885,554 Net assets at the end of the period 504,716, ,885, Number of units * Number of units issued (including 240,738 bonus units issued during the period ended March 31, 2014 and 270,147 bonus units issued during the period ended March 31, 2013) 993,361 2,059,807 ** Number of units redeemed 1,659, ,680 The annexed notes from 1 to 14 form an integral part of this condensed interim financial information.

14 13 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited) 1. LEGAL STATUS AND NATURE OF BUSINESS Faysal Income & Growth Fund (the Fund) has been established under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (the NBFC Rules) and has been authorized as a unit trust scheme by the Securities and Exchange Commission of Pakistan (SECP) on June 24, It has been constituted under a Trust Deed dated April 27, 2005 between Faysal Asset Management Limited (the Management Company), a company incorporated under the Companies Ordinance, 1984 and Central Depository Company of Pakistan Limited (CDC) as the Trustee, also incorporated under the Companies Ordinance, The Fund was launched on October 10, The Fund is an open-ended aggressive income scheme and offers units for public subscription on a continuous basis. The units are transferable and can be redeemed by surrendering them to the Fund. The units are listed on the Karachi Stock Exchange Limited. The objective of the Fund is to provide investors optimal yield through diversified portfolio consisting of both long-term fixed instruments as well as short term money market instruments. The Fund is categorised as a "Aggressive Fixed Income Scheme" as per the circular 07 of 2009 issued by Securities and Exchange Commission of Pakistan. The JCR - VIS Credit Rating Company Limited (JCR - VIS) has assigned a "A+(f)" fund rating to Faysal Income & Growth Fund as of August 02, JCR - VIS has awarded an "AM3+" asset manager rating to the Management Company as of December 27, BASIS OF PREPARATION The condensed interim financial information has been prepared in accordance with the requirements of International Accounting Standard 34: Interim Financial Reporting, the Trust Deed, the NBFC Rules, Non- Banking Finance Companies and Notified Entities Regulations, 2008 (NBFC Regulations) and directives issued by SECP. In case where requirements differ, the requirements of the Trust Deed, the NBFC Rules, the NBFC Regulations or the directives issued by the SECP prevail. The 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 financial statements of the Fund for the year ended June 30, ACCOUNTING POLICIES AND ESTIMATES The accounting policies, basis of accounting estimates applied and methods of computation adopted in the preparation of this condensed interim financial information and financial risk management objectives and policies are the same as those applied in the preparation of the annual financial statements of the Fund for the year ended June 30, 2013, except as described in note 3.1 and 3.2.

15 14 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited) 3.1 Standard, interpretation or amendment IFRS 7 Presentation of Financial Statements Presentation of items of comprehensive income Amendments enhancing disclosures about offsetting of financial assets and financial liabilities IAS 19 IFRIC 20 Employee Benefits (Revised) Stripping Costs in the Production Phase of a Surface Mine Improvements to Accounting Standards Issued by the IASB IAS 1 IAS 16 IAS 32 IAS 34 Presentation of Financial Statements - Clarification of the requirements for comparative information Property, Plant and Equipment Clarification of Servicing Equipment Financial Instruments : Presentation Tax Effects of Distribution to Holders of Equity Instruments Interim Financial Reporting Interim Financial Reporting and Segment Information for Total Assets and Liabilities 3.2 Receivable against Margin Trading System (MTS) Transaction of purchase under Margin Trading System (MTS) of marketable securities are entered into contracted rates for specified period of time. Securities purchase under the MTS are not recognised in the Statement of Assets and Liabilties. The amount paid under such agreement is recognised as " Receivable against Margin Trading System (MTS)". Profit is recognised on accrual basis using the effective interest rate method. Cash releases are adjusted against the receivable as reduction in the amount of receivable. The maximum maturity of a MTS contract is 60 calendar days and 25% of the exposure is released automatically at the expiry of every 15th calendar day. 3.3 During the period, following amendments, interpretations and improvements to the accounting standards became effective: The adoption of the above standards, amendments, interpretations and improvements did not have any effect on these condensed interim financial statements of the Fund. The significant judgements made by management in applying the accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements for the year ended June 30, BANK BALANCES AND TERM DEPOSIT RECEIPTS Note (Un-Audited) (Audited) March 31, June (Rupees) Cash at bank - PLS savings accounts ,753,998 18,766,116 Term deposit receipt ,000,000 65,000, ,753,998 83,766, These carry mark-up ranging from 7.00% to 9.55% (June 30, 2013: 6.00% to 9.25%) per annum and include balance of Rs million (June 30, 2013: Rs.1.18 million) held with Faysal Bank Limited (a related party). This carries mark-up at the rate of 10.15% (June 30, 2013: 9.90%) per annum and has maturity on July 08, INVESTMENTS At fair value through profit or loss - held-for-trading Debt securities Designated 'at fair value through profit or loss' Debt securities ,472, ,995,782 Government securities ,897, ,764, ,370, ,760,592 Held to maturity Certificates of Investment ,038,220 Commercial papers ,127,776 67,115,630 Letters of placement Certificate of musharika ,127, ,153, ,497, ,914,442

16 15 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited)

17 16 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited)

18 17 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited) 6. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES Considered good (Un-Audited) (Audited) March 31, June 30, Note (Rupees) Prepayments 244,933 - Security deposits: - National Clearing Company of Pakistan Limited 250,000 2,500,000 - Central Depository Company of Pakistan Limited 100, , ,000 2,600,000 Profit receivable on debt securities 12,007,406 13,636,085 Return receivable on bank balances and term deposit receipts 1,854, ,965 Receivable against redemption of debt securities - 5,000 Income receivable on Margin Trading System (MTS) 112,127 - Advance against Pre IPO subscription ,000,000-51,568,673 16,834, PAYABLE TO THE MANAGEMENT COMPANY Management fee payable , ,597 Sales tax payable on Management fee 147, , , , This represents subscription in Pre IPO against NIB Bank Limited - TFC II and carries mark up at the rate of 6 Months KIBOR plus 1.15% having tenor of eight years. The Management Company is entitled to a remuneration for services rendered to the Fund under the provisions of the NBFC Regulations during the first five years of a Fund s existence of an amount not exceeding three percent of the average annual net assets of the Fund and thereafter of an amount equal to two per cent of such assets. The Management Company has charged its remuneration at the rate of 1.5% per annum of the daily net asset value of the Fund (June 30, 2013: 1.5% per annum). 8. ACCRUED AND OTHER LIABILITIES SECP annual fee payable 283, ,765 Accrued expenses 1,005, ,468 Provision for Workers' Welfare Fund 8.1 7,133,414 6,427,533 Provision for federal excise duty on remuneration of the Management Company ,257 77,273 8,810,823 7,839, Through the Finance Act, 2008, an amendment was made in section 2(f) of the Workers' Welfare Fund Ordinance, 1971 (the WWF Ordinance) whereby the definition of 'Industrial Establishment' has been made applicable to any establishment to which West Pakistan Shops and Establishment Ordinance, 1969 applies. As a result of this amendment, it is alleged that all Collective Investment Schemes (CISs) / mutual funds whose income exceeds Rs.0.5 million in a tax year have been 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 is higher. In this regard, a constitutional petition has been filed by certain CISs through their trustees in the Honourable High Court of Sindh (SHC), challenging the applicability of WWF to the CISs, which is pending adjudication. In August 2011, the Lahore High Court (LHC) issued a judgement in response to a petition in similar case whereby the amendments introduced in WWF Ordinance through Finance Acts, 2006 and 2008 have been declared unconstitutional and therefore struck down. However, during March 2013, the SHC larger bench issued a judgement in response to various petitions in similar cases whereby the amendments introduced in the Workers Welfare Fund Ordinance, 1971 through Finance Act, 2006 and 2008 respectively (Money Bills) have been declared constitutional and overruled a single-member bench judgement issued in August 2011.

19 18 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited) MUFAP's legal counsel is of the view that the stay granted to mutual funds in respect of recovery of WWF remains intact and the constitutional petitions filed by the Mutual Funds to challenge the Workers Welfare Fund contribution have not been affected by the Judgement passed by the larger bench of SHC. 8.2 As the matter relating to levy of WWF is currently pending in the Court, the Management Company, as a matter of prudence, has decided to retain and continue with the provision for WWF amounting to Rs million (June 30, 2013: Rs million) in this this condensed interim financial information. Had the provision not been made, the net asset value per unit of the Fund would have been higher by Rs (1.41%) per unit (June 30, 2013: Rs.1.20 (1.14%) per unit). As per the requirements of the Finance Act 2013, Federal Excise Duty (FED) at the rate of 16% on the services of the Management Company has been applied effective June 13, The Management Company is of the view that since the remuneration is already subject to provincial sales tax, further levy of FED results in double taxation, which does not appear to be the spirit of the law. The matter has been collectively taken up by the Management Company jointly with other Asset Management Companies and Central Depository Company of Pakistan Limited on behalf of schemes through a constitutional petition filed in the Honourable Sindh High Court (SHC) during September 2013 which is pending adjudication. However, the SHC has issued a stay order against the recovery of FED. The Fund, as a matter of abundant caution, has charged FED in its financial statements with effect from June 13, CONTINGENCIES AND COMMITMENTS There were no contingencies outstanding as at March 31, (Un-Audited) (Audited) March 31, June 30, Note (Rupees) COMMITMENTS Margin Trading System (MTS) transactions entered into by the Fund which have not been settled as at March 31, 2014 Purchase transactions 28,424,153 - Sale transactions 23,002, TAXATION The income of the Fund is exempt from income tax under Clause 99 of Part I of the Second Schedule of the Income Tax Ordinance, 2001 subject to the condition that not less than 90 percent of the accounting income for the year, as reduced by capital gains, whether realised or unrealised, is distributed amongst the unit holders. The Management Company intends to distribute not less than 90 percent of its annual accounting income other than unrealised capital gains, if any, to comply with the above clause at year end. Accordingly, no provision for current and deferred tax has been made in this condensed interim financial information TRANSACTIONS WITH CONNECTED PERSONS / RELATED PARTIES 11.1 Connected persons / 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 having common management and / or directorship and the directors and officers of the Management Company and the Trustee The transactions with connected persons are in the normal course of business, at contracted rates The details of significant transactions carried out by the Fund with connected persons / related parties and balances with them at period end are as follows:

20 19 Notes to the Condensed Interim Financial Information For the Nine Months Ended March 31, 2014 (Un-Audited) Transactions during the period (Un-Audited) March 31, March 31, (Rupees) Faysal Asset Management Limited (Management Company) Remuneration of Management Company 5,665,840 6,683,498 Sales tax on management fee 1,051,064 1,069,360 FED paid during the period 518,934 - Faysal Asset Management Limited - Employees Provident Fund Issue of Nil units (2013: 15,272 units) - 1,630,000 Redemption of 2,379 units (2013: Nil) 250,000 - Bonus issue of 763 units (2013: 690 units) 80,554 72,581 (Un-Audited) March 31, March 31, (Rupees) Faysal Asset Management Limited - Staff Gratuity Fund Issue of Nil units (2013: 4,685 units) - 500,000 Bonus issue of 262 units (2013: 212 units) 27,661 22,264 Faysal Bank Limited (group company) Cash dividend paid 3,336,478 14,991,099 Redemption of 74,955 units (2013: Nil units) 7,923,680 - Profit on PLS saving accounts 102, ,996 Bank Charges 2,328 33,344 Central Depository Company of Pakistan Limited (Trustee of the Fund) Remuneration of the Trustee 642, ,490 Settlement charges 4,992 8,854 Unit Holder Holding 10% or more units National Refinery Executive Staff Post Retirement Medical Funds Bonus issue of 47,588 (2013: 64,644 units) 5,023,638 6,764,588

21 20 Notes to the Condensed Interim Financial Information For the Half Year nded December 31, 2013 (Un-Audited) Outstanding balances as at period end (Un-Audited) (Audited) March 31, June 30, (Rupees) Faysal Asset Management Limited (Management Company) Remuneration payable to the Management Company 636, ,597 Sales tax payable on management fee 147, ,823 Faysal Asset Management Limited - Employees Provident Fund Units in issue: 14,774 units (2013: 16,390 units) 1,595,434 1,735,974 Faysal Asset Management Limited - Staff Gratuity Fund Units in issue: 5,290 units (2013: 5,028 units) 571, ,549 Faysal Bank Limited (Group company / Associated Company) Units in issue 589,512 units (2013: 664,467 units) 63,661,447 70,378,132 Balance in PLS saving account 572,893 1,184,449 Profit Receivable on PLS savings account 2, Central Depository Company of Pakistan Limited (Trustee of the Fund) Remuneration payable to the Trustee 71,781 93,142 Security deposit 100, ,000 (Unit Holder Holding 10% or more units) National Refinery Limited - Executive Staff Post Retirement Medical Fund Units in issue 960,652 units (2013: 913,065 units) 103,740,860 96,708,762

22 21 Notes to the Condensed Interim Financial Information For the Half Year nded December 31, 2013 (Un-Audited) 12. SUBSEQUENT EVENT The Chief Executive Officer on behalf of the Board of Directors on April 02, 2014 and the Board of Directors of the Management Company in their meeting held on April 28, 2014 have declared an interim payouts at the rate of 1.45 % i.e. Rs per unit and 0.20% i.e. Rs per unit respectively (March 31, 2013: 2.20% i.e Rs per unit). This condensed interim financial information of the Fund for the period ended March 31, 2014 does not include the effect of the distributions which will be accounted for in the financial statements of the Fund subsequent to the period end. 13. GENERAL 13.1 Figures are rounded off to the nearest rupee. 14. DATE OF AUTHORISATION FOR ISSUE This condensed interim financial information was authorised for issue on April 28, 2014 by the Board of Directors of the Management Company.

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