JS Aggressive Asset Allocation Fund

Transcription

1 Half Yearly Report for the period ended December 31, Managing Mutual Funds Better!

2 CONTENTS Vision and Mission Statement...02 Organization...03 Directors Report to the Unit Holders...04 Trustee Report to the Unit Holders...05 Auditors Report to the Unit Holders on Review of Condensed Interim Financial Information...06 Condensed Interim Statement of Assets and Liabilities...07 Condensed Interim Income Statement...08 Condensed Interim Statement of Comprehensive Income...09 Condensed Interim Cash Flow Statement...10 Condensed Interim Statement of Movement in Unit Holders Fund...11 Condensed Interim Distribution Statement...12 Notes to the Condensed Interim Financial Statements

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 ORGANIZATIO N Management Company JS Investments Limited 7th Floor, The Forum, G-20 Khayaban-e-Jami, Block-9, Clifton Karachi Tel: (92-21) Fax: (92-21) info@jsil.com 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 Asif Reza Sana Chairman Muhammad Khalil Ur Rehman Member Suleman Lalani Member Chief Financial Officer & Company Secretary Muhammad Khawar Iqbal Trustee Auditors Central Depository Company of Pakistan Limited CDC House, 99-B, Block 'B', S.M.C.H.S., Main Sharah-e-Faisal, Karachi Pakistan. Tel: (92-21) Ernst & Young Ford Rhodes Sidat Hyder Chartered Accountants Legal Adviser Bawaney & Partners Transfer Agent 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 HO LDERS The Board of Directors of JS Investments Limited has pleasure in presenting to you the un-audited Financial Statements of JS Aggressive Asset Allocation Fund for the six months period ended December 31,. Equity Market Review Looking at performance for 1HFY15, the KSE 30 Index posted a positive return of 1.70% in the period against a return of % in the same period last year. With increasing political uncertainty along with the recent floods, investors reduced their risk profile for equities in the 1QFY15 while towards the end of 2QFY15 the market witnessed some value buying. On the other hand, foreigner's interest in the local equity market remained strong. In 2QFY15, the KSE-30 Index posted a return of 2.80% QoQ on account of improvement in macros due to lower international oil prices and expected decline in interest rates going forward. Moreover, towards the end of the quarter political uncertainty went down as the government was able to withstand the political turmoil. The country also received an IMF tranche of around $ 1.10 billion towards the end of Dec-14 while an International Sukuk Issue was oversubscribed where Pakistan was able to raise more than $ 1.00 billion. However, the Oil Sector on the KSE underperformed the broader market due to lower international oil prices while financials along with industrial companies continued to post gains. Fund Performance The Net Asset Value ("NAV") per unit has increased by 6.60% from beginning NAV of Rs per unit as on June 30, compared to NAV of Rs as on December 31,. The Fund outperformed its benchmark by 3.04%. The net assets of the Fund were Rs million as on December 31, compared to Rs million as on June 30,. The Board of Directors (BoD) of JSIL, in their 117th Meeting held on June 26, approved the proposed Scheme of Merger of JS Aggressive Asset Allocation Fund (JS AAAF), JS KSE-30 Index Fund (JS KSE-30) with and into JS Large Cap. Fund (JS LCF). Subsequently, the proposed Scheme of Merger (SoM) was approved by the unit holders in their respective Unit Holders' meetings held on July 23,. JSIL proceeded with filing the application with SECP in respect of obtaining approval on the proposed Scheme of Merger. Meanwhile, JSIL has also obtained the 'No Objection' from the Competition Commission of Pakistan (CCP) in respect of the proposed Scheme of Merger. The final Effective Date of the proposed merger shall be notified publically, subject to SECP's approval in respect of the same Fund and Asset Manager Rating Keeping in view the decision of the BoD of JSIL in its meeting held on June 26, and subsequent holding of the general meeting of the unit holders on July 23, for approving the proposed scheme of merger of JS AAAF with and into JS LCF, the process of obtaining the Fund's performance ranking shall remain on hold till the conclusion of the afore stated merger. JCR-VIS Credit Rsating Company Limited has reaffirmed Management Quality Rating of "AM2-"(AM- Two Minus) 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 Unit holders for their confidence in the Management. On behalf of the Board Karachi: February 23, 2015 Ali Akhtar Ali Chief Executive Officer 04

6 TRUSTEE REPORT TO THE UNIT HOLDERS Report of the Trustee pursuant to Regulation 41(h) of the Non-Banking Finance Companies and Notified Entities Regulations, 2008 We, Central Depository Company of Pakistan Limited, being the Trustee of JS Aggressive Asset Allocation Fund (the Fund) are of the opinion that JS Investments Limited being the Management Company of the Fund has in all material respects managed the Fund during the six months period ended December 31, in accordance with the provisions of the following: (i) Limitations imposed on the investment powers of the Management Company under the constitutive documents of the Fund; (ii) The pricing, issuance and redemption of units are carried out in accordance with the requirements of the constitutive documents of the Fund; and (iii) The Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003, the Non Banking Finance Companies and Notified Entities Regulations, 2008 and the constitutive documents of the Fund. Karachi: February 16, 2015 Aftab Ahmed Diwan Officiating Chief Executive Officer Central Depository Company of Pakistan Limited 05

7 AUDITORS' REPORT TO THE UNIT HOLDERS ON REVIEW OF INTERIM FINANCIAL INFORMATION Introduction We have reviewed the accompanying interim statement of assets and liabilities of JS Aggressive Asset Allocation Fund ("the Fund") as at 31 December and the related condensed interim statements of income statement, comprehensive income, cash flows, movement in unit holders' fund, and distribution together with the notes forming part thereof (here-in-after referred to as the "interim financial information") for the six-months period then ended. Management Company (JS Investments Limited) is responsible for the preparation and presentation of the 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. Emphasis of Matter We draw attention to note 1.2 to the accompanying financial statement, which states that the Board of Directors of the Management Company has approved the merger of the Fund, subject to completion of requisite legal and regulatory requirements. Ernst & Young Ford Rhodes Sidat Hyder Date: February 23, 2015 Chartered Accountants Engagement Partner: Shabbir Yunus 06

8 CO NDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) AS AT 31 DECEMBER Assets Note 31 December 30 June...Rupees... (Unaudited) (Audited) Bank balances 4 25,807,317 5,516,584 Investments 5 98,732,345 99,972,700 Accrued mark-up / interest 144,310 77,113 Dividend receivable 323,000 45,000 Deposit, prepayments and other receivables 6 2,609,918 7,992,572 Total assets 127,616, ,603,969 Liabilities Remuneration payable to the Management Company 188,749 23,745 Sales tax payable on remuneration of the Management Company 107,749 57,171 Provision for Federal Excise Duty on remuneration of the Management Company 7 507, ,571 Remuneration payable to Trustee 59,452 57,534 Accrued and other liabilities 8 13,195,435 4,676,382 Total liabilities 14,058,721 5,148,403 N et assets 113,558, ,455,566 Unit holders fund (as per the statem ent attached) 113,558, ,455, (Number of units) N um ber of units in issue 7,476,652 7,613, (Rupees) N et asset value per unit The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Naza Mohammad Shaikh Director 07

9 CONDENSED INTERIM INCOME STATEMENT (UNAUDITED) FOR THE HALF YEAR AND QUARTER ENDED 31 DECEMBER Half year ended 31 December 31 December 2013 Quarter ended 31 December 31 December 2013 Income Mark-up / interest income on...rupees......rupees... bank balances and investments 1,631,615 1,503, , ,983 Net gain on investments classified as 'at fair value through profit or loss' - held-for-trading - Net capital gain on sale of investments 9,601,427 31,457,519 10,394,720 18,015,300 - Net unrealised (loss) / gain on revaluation of investments (385,915) 820, ,730 6,201,502 Amortisation of discount on held-for-trading investments 6, Dividend income 481,750 2,801, ,250 1,873,300 Other income 4, ,000 4,455 - Element of (loss) / income and capital (losses) / gains included in prices of units issued less those of units redeemed - net (25,329) 380,432,146 (24,801) 38,269,879 11,314, ,115,507 11,628,949 65,142,964 Expenses Remuneration of the Management Company 1,086,030 1,427, , ,868 Sales tax on remuneration of the Management Company 188, ,871 95, ,903 Federal excise duty on remuneration of the Management Company 173, ,337 88, ,779 Remuneration of the Trustee 352, , , ,438 Annual fee to Securities and Exchange Commission of Pakistan 51,588 67,788 26,155 29,919 Listing fee 10,082 15,123 5, Securities transaction cost 1,576,704 2,261, , ,580 National Clearing Company of Pakistan Limited fee 180, ,572 88,260 58,232 Bank and settlement charges 53,174 60,224 31,310 8,630 Auditors' remuneration 399,434 50, ,622 25,205 Provision for contribution to Workers' Welfare Fund ,938 8,244, ,938 1,224,443 Printing and stationery 43,851 11,317 15,607 7,317 4,261,124 13,131,585 2,373,996 3,225,437 Net Income for the period 7,052, ,983,922 9,254,953 61,917,527 The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Naza Mohammad Shaikh Director 08

10 CO NDENSED INTERIM STATEMENT OF CO MPREHENSIVE INCOME (UNAUDITED) FOR THE HALF YEAR ENDED 31 DECEMBER 31, Half year ended 31 December 31 December Rupees... Quarter ended 31 December 31 December Rupees... Net Income for the period 7,052, ,983,922 9,254,953 61,917,527 Other comprehensive income Total comprehensive income for the period 7,052, ,983,922 9,254,953 61,917,527 The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Naza Mohammad Shaikh Director 09

11 CONDENSED INTERIM CASH FLO W STATEMENT (UNAUDITED) FOR THE HALF YEAR ENDED 31 DECEMBER Half year ended 31, December 31, December 2013 Cash flows from operating activities...rupees... Net income / (loss) for the period 7,052, ,983,922 Adjustments for: Mark-up / interest income on bank balances and investments (1,631,615) (1,503,663) Unrealised loss / (gain) on revaluation of investments classified as 'at fair value through profit or loss' - held-for-trading 385,915 (820,379) Net capital (gain) on sale of investments classified as 'at fair value through profit or loss' - held-for-trading (9,601,427) (31,457,519) Amortization of discount on held-for-trading investments (6,103) - Other income (4,455) - Element of loss / (income) and capital losses / (gains) included in prices of units issued less those of units redeemed - net 25,329 (380,432,146) Operating loss before working capital changes (10,832,356) (10,229,785) Decrease / (increase) in current assets Dividend receivable (278,000) 156,700 Deposit, prepayments and other receivables 5,382,654 4,259,642 5,104,654 4,416,342 Increase / (decrease) in current liabilities Remuneration payable to the Management Company 165,004 (260,055) Sales tax payable on remuneration of the Management Company 50,578 (30,857) Federal excise duty payable on remuneration of the Management Company 173, ,211 Remuneration payable to Trustee 1,918 1,918 Accrued and other liabilities 8,519,053 21,771,890 8,910,318 21,592,107 Proceeds from sale / redemption of investments 730,151, ,640,637 Payments made against purchase of investments (719,432,995) (837,590,905) Mark-up received on bank balances 1,312,252 1,302,908 Net cash generated from operating activities 22,266, ,131,304 Cash flows from financing activities Amounts received against issue of units 1,450,807 - Payments made against redemption of units (3,426,515) (65,252,121) Net cash used in financing activities (1,975,708) (65,252,121) Net Increase in cash and cash equivalents during the period 20,290,733 69,879,183 Cash and cash equivalents at the beginning of the period 5,516,584 5,978,571 Cash and cash equivalent at the end of the period 25,807,317 75,857,754 The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Naza Mohammad Shaikh Director 10

12 CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUND (UNAUDITED) FOR THE HALF YEAR ENDED 31 DECEMBER Half year ended 31, December 31, December Rupees... Net assets as at the beginning of the period 108,455, ,721,688 [Rs per unit (June 30, 2013: Rs per unit) Issue of 98,781 units (June 30, 2013: Nil units) 1,450,807 - Redemption of 235,649 units (June 30, 2013: 4,456,843 units) (3,426,515) (65,252,121) Element of loss / (income) and capital losses / (gains) included in prices of units issued less those of units redeemed - net 25,329 (380,432,146) Net capital gain on sale of investments 9,601,427 31,457,519 Net unrealised (loss) / gain on revaluation of investments (385,915) 820,379 Other net (loss) / income for the period (2,162,530) 371,706,024 Total comprehensive income 7,052, ,983,922 Net assets as at the end of the period 113,558, ,021,343 [Rs per unit (December 31, 2013: Rs per unit)] The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Naza Mohammad Shaikh Director 11

13 CONDENSED INTERIM DISTRIBUTIO N STATEMENT (UNAUDITED) FOR THE HALF YEAR ENDED 31 DECEMBER Half year ended 31, December 31, December Rupees... Accumulated loss brought forward Unrealised gain / (loss) 3,894,627 (1,063,066) Realised loss (1,109,956,501) (1,108,673,647) (1,106,061,874) (1,109,736,713) Net Income for the period 7,052, ,983,922 Accumulated loss carried forward (1,099,008,892) (705,752,791) Accumulated loss carried forward comprises of: Realised loss (1,099,067,074) (706,573,170) Unrealised gain - net 58, ,379 (1,099,008,892) (705,752,791) The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements. For JS Investments Limited (Management Company) Ali Akhtar Ali Chief Executive Officer Naza Mohammad Shaikh Director 12

14 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED) FOR THE HALF YEAR ENDED 31 DECEMBER 1. LEGAL STATUS AND NATURE OF BUSINESS 1.1 JS Aggressive Asset Allocation Fund (the Fund) was established under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (NBFC Rules) as an open-end unit trust scheme. The Fund is governed under Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 and Non-Banking Finance Companies and Notified Entities Regulations, The Fund was constituted under a Trust Deed, dated April 19, 2005 between JS Investments Limited as the Management Company, a company incorporated under the Companies Ordinance,1984 and the Central Depository Company of Pakistan Limited as the Trustee, also incorporated under the Companies Ordinance, The Management Company of the Fund is registered with the SECP as a Non-Banking Finance Company under the NBFC Rules. Its registered office is located at 7th Floor, The Forum, Clifton, Karachi, Pakistan. The Fund offers units for public subscription on a continuous basis. The units are transferable and can also be redeemed by surrendering them to the Fund. The units are listed on the Lahore Stock Exchange. The principal activity of the Fund is to make investments primarily in equity securities of large, mid and small capital base companies, fixed rate corporate debt instruments, government securities and other money market instruments (subject to the guidelines given by the Securities and Exchange Commission of Pakistan). The Pakistan Credit Rating Agency (PACRA) Limited has assigned an entity rating of "A+" to the Management Company. Title to the assets of the Fund is held in the name of Central Depository Company as a Trustee of the Fund. The Fund is categorised as an "Asset Allocation Scheme" as per the circular number 07 of 2009 issued by Securities and Exchange Commission of Pakistan. 1.2 Proposed merger of the Fund The net assets of the Fund as of December 31, were Rs million and had remained close to this level for a considerable period of time and therefore the Fund was on the verge of non-compliance of minimum fund size requirement of Rs.100 million as mentioned in the sub-regulation 54(3a) of the Non Banking Finance Companies and Notified Entities Regulation, 2008 ( NBFC Regulations ). In view of this, a merger resolution was approved by the Board of Directors of the Management Company on April 24, 2013, whereby it was resolved that JS Aggressive Asset Allocation Fund and JS KSE-30 Index Fund may simultaneously be merged into JS Fund of Funds. However, SECP in its letter dated March 12, did not accede to the Merger Scheme of JS Aggressive Asset Allocation Fund and JS KSE-30 Index into JS Fund of funds (JSFOF) on the grounds that surviving scheme (i.e. JSFOF) is only authorized to hold units of other mutual funds and not the equity / fixed income securities in its portfolio. Accordingly, the Board of Directors of the Management Company, in their Meeting held on June 26, approved the proposed scheme of Merger of JS Aggressive Asset Allocation Fund and JS KSE-30 Index Fund with JS Large Cap. Fund in order to enhance the capital base and comply with the statutory requirements regarding minimum fund size. The management has initiated the process of completing the formalities as per the requirements of the NBFC Regulations, 2008 and the SECP's Circular 20 of In this respect, although the unit holders meetings of respective funds were convened on July 23, for the approval of the merger as stipulated in the NBFC regulations, however the requisite 75% majority in value of the total outstanding units, as stipulated in SECP circular 20 of 2009, could not be achieved through voting. Accordingly, as resolved and authorized by the unit holders, the Management Company has approached SECP for necessary relaxation in terms of provision of clause 2(vi) of the circular 20 of 2009 and approval of the scheme of merger. SECP vide its letter dated September 19,, in response to the above request by the Management Company, advised the Company to get an approval from the Competition Commission of Pakistan (CCP) on the proposed merger and submit certain other information and confirmations, which have been provided by the Management Company. Therefore, the Company approached CCP on October 02, for the grant of its No Objection Certificate (NOC) in respect of the proposed scheme of merger. Subsequently, on December 19,, the Management Company made an application to CCP pursuant to regulation 5 of the Competition (Merger Control) Regulations, 2007 read with sub-section (3) of Section 11 of the Competition Act, 2010 and filed a pre-merger application as per schedule of the above reformed regulation. The Management Company has received the approval from CCP on January 27, 2015 and is awaiting approval from SECP accordingly. 13

15 2. BASIS OF PREPARATION The condensed interim financial statements have 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. These condensed interim financial statements do 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,. These condensed interim financial statements are un-audited but subject to limited scope review by the auditors. 3. ACCOUNTING POLICIES AND ESTIMATES The accounting policies, basis of accounting estimates applied and methods of computation adopted in the preparation of these condensed interim financial statements 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,, except as described in note The Fund has adopted the following revised standard, amendments and interpretation of IFRSs which became effective for the current period: IAS 19 Employee Benefits - Employee Contributions (Amendment) IAS 32 Financial Instruments : Presentation (Amendment) Offsetting Financial Assets and Financial Liabilities IAS 36 Impairment of Assets (Amendment) Recoverable Amount Disclosures for Non-Financial Assets IAS 39 Financial Instruments: Recognition and Measurement (Amendment) Novation of Derivatives and Continuation of Hedge Accounting IFRIC 21 Levies The adoption of the above amendments to accounting standards and interpretations did not have any effect on the condensed interim financial statements. In addition to the above standards and interpretations, improvements to various accounting standards have also been issued by the IASB and are generally effective for current period. Such improvements to the standards do not have any impact on the Fund's financial statements for the period. 3.2 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,. 4. BANK BALANCES Note 31 December 30 June...Rupees... (Unaudited) (Audited) PLS savings accounts ,807,317 5,516, These carry rate of return ranging from 7.5% to 9.5% (June 30, : 7.5% to 9.5%) per annum and include balance of Rs.23,473,936 (June 30, : Rs.4,355,009) with JS Bank Limited, a related party. 5. INVESTMENTS At fair value through profit or loss - held-for-trading Listed equity securities ,732,345 99,972,700 Government Securities ,732,345 99,972, Listed equity securities* * Ordinary shares have a face value of Rs.10 each unless stated otherwise. 14 Note 31 December 30 June...Rupees... (Unaudited) (Audited)

16 Name of the Investee Company As at June 30, Purchase during the period Bonus received during the period 15 Disposed during the period As at December 31, Market value / carrying value As at December 31, Number of shares (Rupees) % of Net Assets % of Investee Capital Oil and gas AttockRefineryLimited - 227, ,600 47,500 8,919, OilandGasDevelopment CompanyLimited 26,000 48,100-74, PakistanOilfieldsLimited - 30,000-30, PakistanPetroleumLimited - 45,000-45, PakistanStateOilCompanyLimited 20, , , ,919, Chemicals ArchromaPakistanLimited - 57,500-57, EngroCorporationLimited - 240, ,900 30,000 6,645, ,645, Construction and materials (cement) D.G.KhanCementCompanyLimited 103, , , MapleLeafCementCompanyLimited 200, , , KohatCementCompanyLimited 85,000 85, LuckyCementLimited - 36,700-17,700 19,000 9,505, ,505, Auto mobile and parts Agriauto Industries Limited (Ordinaryshares of Rs.5 each) 17,000 35,000-52, TheGeneralTyre&RubberCompanyLimited - 190, ,000 47,500 6,917, AtlasHondaLimited - 9,700-9, IndusMotorCompanyLimited - 33,000-27,500 5,500 4,841, PakSuzukiMotorCompanyLimited - 133, ,500 25,000 9,278, ,037, Food producers NestlePakistanLimited RafhanMaizeProductsCompanyLimited - 1, ,000 11,203, ,203, Forestry(paperandboard) CenturyPaper & Board Mills Limited - 288, , ,000 5,908, Industrial metals and mining International Steel Limited - 268, , Engineering BolanCastingsLimited - 170, , MillatTractorsLimited - 11,000-11, HinoPakMotorsLimited - 32,200-32, Al-GhaziTractorsLimited(OrdinarysharesRs.5each) - 22,000 22, Industrial transportation PakistanNationalShippingCorporation - 157, , Pharma and bio-tech AbbottLaboratories(Pakistan)Limited - 12,000-12, HighnoonLaboratoriesLimited 22, , House holdgoods PakElektronLimited - 165, , Personal goods (textile) GadoonTextileLimited 37,000 72, , NishatMillsLimited 83, , ,

17 Name of the Investee Company As at June 30, Purchase during the period Bonus received during the period Disposed during the period As at December 31, Market value / carrying value As at December 31, Number of shares (Rupees) % of N et Assets % of Investee Capital Fixed line telecommunication Pakistan Telecommunication Company Limited 200, , , General industrials Thal Limited (Ordinary shares Rs.5 each) - 37,200-37, Non-life insurance Adamjee Insurance Company Limited 145, , , ,000 8,655, IGI Insurance Limited 40,000 32,100-37,600 34,500 9,335, EFU General Insurance Limited (a related party) 76,500 51,000-76,500 51,000 7,797, ,787, Commercial banks MCB Bank Limited - 35,000-35, Faysal Bank Limited 450, ,000-1,200, Habib Metropolitan Bank Limited - 225, , Bank Alfalah Limited 325, , , Habib Bank Limited - 75,000-75, National Bank of Pakistan Limited - 140, ,000 9,724, United Bank Limited - 65,000-65, ,724, ,732, Cost of held-for-trading investments as at December 31,. 98,674, Government Securities (face value of Rs.100,000) Holding at the beginning of the period Number of Certificate Acquired during the period Matured / Disposed During the period As of December 31, Fair Value as on December 31, Treasury Bills Pakistan Investment Bonds Note 31 December (Unaudited) 30 June (Audited)...Rupees DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES Deposit with National Clearing Company of Pakistan Limited 2,500,000 2,500,000 Deposit with Central Depository Company of Pakistan Limited 100, ,000 Prepaid annual listing fee 9,918 - Receivable against transaction in marketable securities - 5,392,572 2,609,918 7,992,572 16

18 7. PROVISION FOR FEDERAL EXCISE DUTY ON REMUNERATION OF THE MANAGEMENT COMPANY , , 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 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 does not appear to be the spirit of the law. A stay order against th collection has 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. 8. ACCRUED AND OTHER LIABILITIES Payable against purchase of marketable securities 8,573,232 - Auditors' remuneration 371, ,195 Zakat payable 6,421 6,706 Payable against Workers' Welfare Fund 8.1 4,070,143 3,926,205 SECP annual fee payable 51, ,577 Other payable 122, ,699 13,195,435 4,676, The Finance Act 2008 introduced an amendment to the Workers' Welfare Fund Ordinance, 1971 (WWF Ordinance). As a result of this amendment it may be construed that all Collective Investment Schemes / mutual funds (CISs) whose income exceeds Rs.0.5 million in a tax year, have been brought within the scope of the WWF Ordinace, 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 (the Court), challenging the applicability of WWF to the CISs, which is pending adjudication. During the year 2011, a single bench of the Lahore High Court (LHC) in a constitutional petition relating to the amendments brought in the WWF Ordinance, 1971 through the Finance Act, 2006, and the Finance Act 2008, has declared the said amendments as unlawful and unconstitutional and struck them down. However, in the month of March 2013, a larger bench of the Sindh High Court (SHC) in various constitutional petitions declared that amendments brought in the WWF Ordinance, 1971 through the Finance Act, 2006, and the Finance Act, 2008, do not suffer from any constitutional or legal infirmity and overruled a single-member Lahore High Court (LHC) bench judgment issued in August However, as per the advice of legal counsel of MUFAP, the constitutional petitions filed by the CIS (as mentioned in the first paragraph) challenging the applicability of WWF contribution have not been affected by the SHC judgment. As the matter relating to levy of WWF is currently pending in the Court, the Management Company, as a matter of prudence and abundant caution, has decided to recognise the entire provision of Rs.4.07 million (June 30, : Rs.3.92 million) in these financial statements. Had the provision not been made, the net asset value per unit of the Fund would have been higher by Rs.0.54 (3.58%) per unit (June 30, : Rs.0.52 (3.62%) per unit). 9. TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS Related parties / connected persons include JS Investments Limited being the Management Company, Central Depository Company of Pakistan Limited being the Trustee, JS Bank Limited and Jahangir Siddiqui & Company Limited being the Holding Company and ultimate parent of the Management Company respectively, associates of the Management Company and its Holding Company, other funds being managed by the Management Company and Key Management Personnel. 17 Note Note 31 December (Unaudited) 30 June (Audited)...Rupees December (Unaudited)...Rupees June (Audited)

19 Transactions during the period Note 31 December 31 December 2013 (Unaudited)...Rupees... JS Investments Limited - Management Company Remuneration of the Management Company 1,086,030 1,427,109 Sales tax on the remuneration of Management Company 188, ,871 Federal excise duty on the remuneration of Management Company 173, ,337 Other cost incurred 580,087 22,875 Redemption of units Nil (December 31, 2013: 2,828,854) - 42,087,695 Central Depository Company of Pakistan Limited - Trustee Remuneration for the period 352, ,876 Settlement charges 53,002 58,088 JS Bank Limited Interest income 1,293,875 1,460,186 Purchase of Government Securities 24,440,000 - Bank charges JS Global Capital Limited Brokerage commission , ,985 EFU General Insurance Limited Dividend income 76,500 - Key Management Personnel Issue of units 70 (December 31, 2013: Nil) 1,000 - Balances as at period / year end 31 December 31 June (Unaudited) (Audited) JS Investments Limited - Management Company...Rupees... Remuneration payable 188,749 23,745 Sales tax payable on Management Company remuneration 107,749 57,171 Federal Excise Duty payable on Management Company remuneration 507, ,571 Other cost payable - 9,126 Central Depository Company of Pakistan Limited - Trustee Remuneration payable 59,452 57,534 Settlement charges payable 4,256 2,047 Security deposit 100, ,000 JS Bank Limited Bank balance 23,473,936 4,355,009 Return receivable 129,253 67,632 EFU Life Assurance Limited Units held: 681,342 (June 30, : 681,342) 10,349,590 9,709,128 JS Global Capital Limited Brokerage commission payable 9.1 5,351 - Unit holders holding 10% or more of units in issue Units held: 4,251,392 (June 30, : 4,251,392) 64,578,644 60,582,336 Key Management Personnel Units held: 70 (June 30, : Nil) 1,065-18

20 9.1 This represents the amount of brokerage paid to the related party and not the purchase or sale value of securities transacted through them as the ultimate counter-parties in respect of purchase and sale are not related. 10. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue by the Board of Directors of the Management Company on February 23, GENERAL 11.1 Figures for the quarters ended December 31, and December 31, 2013 as reported in these condensed interim financial statements have not been subject to limited scope review by the external auditors The figures have been rounded off to the nearest Rupee. For JS Investments Limited (Management Company) Chief Executive Officer Director 19

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