js islamic pension savings fund - js investments · 2016-02-26 · audited financial statements of...

01

JS ISLAMIC PENSION SAVINGS FUND

CONTENTS

Vision and Mission Statement .........................................................................................................

Organization .................................................................................................................................

Directors' Report to the Participants’ ...............................................................................................

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 Participants’ Sub Fund ............................................

Notes to the Forming Part of Condensed Interim Financial Information ...........................................

02

03

04

06

07

08

10

12

13

14


02

VISIONTo be recognized as a responsible asset manager respected for continuinglyrealizing goals of its investors.

MISSIONTo build JS Investments into a top ranking Asset Management Company;founded on sound values; powered by refined knowhow; supported bya committed team operating within an accountable framework of social,ethical and corporate responsibility - a strong and reliable institution forits shareholders to own; an efficient service provider and value creatorfor clients; an exciting and fulfilling work place for employees; and aparticipant worth reckoning for competitors.

BROAD POLICY OBJECTIVES

Value creation for clients on a sustainable basisMaintain high standards of ethical behaviors and fiduciary responsibilityManage Investments with Prudence and with the aim of providingconsistent returns better than that of peersTake Products and Services to the People, Create awareness onunderstanding financial goals, risks and rewardsProfessional Excellence - Adapt, Evolve and Continuously ImproveMaintain highly effective controls through strong compliance and riskmanagementA talented, diligent and diverse HR


03

ORGANIZATION

Management Company JS Investments Limited7th Floor, The Forum, G-20Khayaban-e-Jami, Block-9, CliftonKarachi-75600Tel: (92-21) 111-222-626Fax: (92-21) 35361724 E-mail: [email protected]: www.jsil.com

Board of Directors Nazar Mohammad Shaikh ChairmanAli Akhtar Ali Chief Executive Officer

Suleman LalaniAsif Reza Sana

Ahsen AhmedKamran Jafar

Muhammad Khalil Ur Rehman Muhammad Raza Dyer

Audit Committee Asif Reza Sana ChairmanMuhammad Khalil Ur Rehman MemberSuleman Lalani Member

Chief Financial Officer& Company Secretary Muhammad Khawar Iqbal

Trustee Central Depository Company of Pakistan LimitedCDC House, 99-B, Block 'B', S.M.C.H.S.,Main Sharah-e-Faisal, Karachi-74400 Pakistan.Tel: (92-21) 111-111-500Fax: (92-21) 34326040

Auditors A.F Ferguson & Co. Chartered Accountants

Legal Adviser Bawaney & Partners

Transfer Agent Technology Trade (Private) Limited241-C, Block 2, P.E.C.H.S, KarachiTel: (92-21) 34391316-7Fax: (92-21) 34391318

Shariah Advisory Council Muhammad Taqi Usmani ChairmanEjaz Ahmed Samdani MemberHassan Ashraf Usmani Member

The Board of Directors of JS Investments Limited has pleasure in presenting to you the un-audited Financial Statements of JS Islamic Pension Savings Fund (the Fund) for the sixmonths period ended December 31, 2015.

Equity Market ReviewLooking at the performance for 1HFY16, the KSE 30 Index posted a return of -10.62% against1.74% in 1HFY15. After quite a decent performance over the last few years, returns remainedin check as valuations peaked.

The index performance was dragged down by index heavy companies such as Oil and Banks.Concerns regarding international oil prices and declining interest rates locally kept sentimentssubdued. Investigations against stock market brokers also had a negative impact on market'ssentiment.

Total Net foreign outflow in 1HFY16 stood at USD 24.60 million against net foreign inflowof USD 113.00 million in 1HFY15 on the back of a selloff in international markets and theexpectation of a rate hike by the US Federal reserve.

Money Market ReviewDuring 1HFY16, the State Bank of Pakistan (SBP) decreased its policy rate by 50bps from6.50% to 6.00%. Average CPI inflation has declined to 2.10% during July-December 2015,meanwhile trend in YoY CPI inflation has reversed; it rose for third consecutive month to3.20% in December 2015. We expect the inflation has bottomed out and will be in the rangeof 3.50% - 4.00% for FY16. The year-on-year growth in broad money (M2) acceleratedlargely due to substantial increase in Net Foreign Assets (NFA) of the banking system. Somestress in liquidity noticed in Q1-FY16 due to increased government borrowing from thescheduled banks steadily eased in Q2-FY16 owing to improved revenue collection and timelyreceipt of foreign flows. Financial Institutions aggressively participated in the PIB auctionswhere the government raised Rs. 305.00 billion in the PIB auction against the target amountof Rs. 350.00 billion during the 1HFY16.

During the 2nd quarter, the SBP borrowed funds worth of Rs. 1.33 trillion through T-billauctions against a target of Rs. 1.10 trillion where the cut off yield for 3 month, 6 month and12 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 decreasingby 3.40 bps and 3.40 bps YoY respectively, as against 9.90% and 9.92% in the same periodlast year.

Review of Fund PerformanceThe Fund was launched on June 16, 2008 for contributions by eligible participants, underthe Voluntary Pension System Rules, 2005 (VPS Rules, 2005), with the objective of assistingand facilitating them to plan for their retirement. The Fund presently has three sub-funds thatare Equity Sub-Fund, Debt Sub-Fund, and Money Market Sub-Fund. Profit for the periodended and the net assets of each sub funds are provided below as on December 31, 2015.

04

DIRECTORS’ REPORT TO THE PARTICIPANTS’


05

Ali Akhtar AliChief Executive OfficerKarachi: February 17, 2016

The fund has 90 participants as on December 31, 2015.

AcknowledgementWe wish to express our gratitude to the employees of the Pension Fund Manager and theTrustee for their dedication and hard work and the participants for their confidence in theManagement.

Money Market Sub-Fund

1.03

57.13

161.94

3.15%

Loss/profit for the period (Rs. in million)

Net Assets (Rs. in million)

Net Asset Value (NAV) per unit (Rupees)

NAV (Decrease)/increase (%)

Equity Sub-Fund

- 2.74

114.41

539.05

- 2.34%

Debt Sub-Fund

1.48

64.03

183.83

4.33%


06


Report on review of Condensed Interim Financial Informationto the Unit Holders

IntroductionWe have reviewed the accompanying condensed interim statement of assets and liabilitiesof JS Islamic Pension Savings Fund as at December 31, 2015 and the related condensedinterim income statement, condensed interim statement of comprehensive income, condensedinterim statement of cash flows, condensed interim statement of movement in participants'sub- funds together with the notes forming part thereof (here-in-after referred to as the'condensed interim financial information'), for the half year ended December 31, 2015. ThePension Fund Manager (JS Investments Limited) is responsible for the preparation andpresentation of this condensed interim financial information in accordance with approvedaccounting standards as applicable in Pakistan for interim financial reporting. Our responsibilityis to express a conclusion on this condensed interim financial information based on our review.The figures of the condensed interim income statement and condensed interim statement ofcomprehensive income for the quarters ended December 31, 2015 and December 31, 2014have not been reviewed, as we are required to review only the cumulative figures for the halfyear ended December 31, 2015.

Scope of ReviewWe conducted our review in accordance with the International Standard on Review Engagements2410, "Review of Interim Financial Information Performed by the Independent Auditor of theEntity." A review of interim financial information consists of making inquiries, primarily ofpersons responsible for financial and accounting matters, and applying analytical and otherreview procedures. A review is substantially less in scope than an audit conducted in accordancewith International Standards on Auditing and consequently does not enable us to obtainassurance that we would become aware of all significant matters that might be identified inan audit. Accordingly, we do not express an audit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that theaccompanying condensed interim financial information as of and for the half year endedDecember 31, 2015 is not prepared, in all material respects, in accordance with approvedaccounting standards as applicable in Pakistan for interim financial reporting.

Chartered AccountantsEngagement Partner: Shahbaz AkbarKarachi: February 17, 2016


07

For JS Investments Limited(Pension Fund Manger)

DirectorNazar Mohammad Shaikh

Chief Executive OfficerAli Akhtar Ali

CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2015

IncomeFinancial income 182,525 1,909,952 1,733,686 3,826,163 314,251 2,589,377 2,518,568 5,422,196Net (loss) / gain on investments at fair value through profit or loss- Net unrealised (loss) / gain on revaluation of investments (2,353,260) 749,943 264,555 (1,338,762) 6,164,862 (1,008,302) (469,101) 4,687,459- Net (loss) / gain on sale of investments (1,292,585) (86,625) (244,099) (1,623,309) 12,655,446 - - 12,655,446Dividend income 2,221,920 - - 2,221,920 2,130,219 - - 2,130,219Element of income / (loss) and capital gains / (losses) included in prices of units issued less those in units redeemed - net (6,025) 22,865 16,252 33,092 77,739 (2,163) 6,440 82,016Total income (1,247,425) 2,596,135 1,770,394 3,119,104 21,342,517 1,578,912 2,055,907 24,977,336

ExpensesRemuneration of the Pension Fund Manager 871,540 468,690 419,197 1,759,427 714,631 446,735 407,131 1,568,497Sales tax on remuneration of the Pension Fund Manager 141,538 76,115 68,078 285,731 124,346 77,732 70,840 272,918Federal Excise Duty on remuneration of the Pension Fund Manager 139,446 74,990 67,072 281,508 114,341 71,479 65,141 250,961Remuneration of the Trustee 97,828 52,565 47,014 197,407 71,145 44,480 40,537 156,162Annual fee of the Securities and Exchange Commission of Pakistan 19,349 10,405 9,307 39,061 15,865 9,917 9,038 34,820Amortisation of premium on investment - 317,043 20,055 337,098 - 209,629 161,573 371,202Auditors' remuneration 70,288 70,287 70,287 210,862 68,685 68,685 68,685 206,055Securities' transaction cost 99,282 325 325 99,932 312,921 1,190 1,060 315,171Custody and settlement charges 8,745 3,420 3,420 15,585 14,386 3,000 3,000 20,386Bank charges 3,251 859 513 4,623 6,819 2,754 2,348 11,921Printing, stationery & postage 5,536 5,530 5,532 16,598 - - - -Legal and professional charges 33,334 33,333 33,333 100,000 - - - -Provision for Workers' Welfare Fund 7.1 - - - - 397,996 12,871 24,536 435,403Total expenses 1,490,137 1,113,562 744,133 3,347,832 1,841,135 948,472 853,889 3,643,496

Net (loss) / income for the period (2,737,562) 1,482,573 1,026,261 (228,728) 19,501,382 630,440 1,202,018 21,333,840

(Loss) / Earnings per unit (12.90) 4.26 2.91 92.27 1.82 3.35

The annexed notes from 1 to 15 form an integral part of this condensed interim financial information.

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund

Money MarketSub-Fund

TotalHalf Year ended 31 December 2015

EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------

Half Year ended December 2014

08


Note




09


CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)FOR THE QUARTER ENDED DECEMBER 31, 2015

IncomeFinancial income 121,117 868,199 755,191 1,744,507 155,808 1,305,622 1,280,962 2,742,392Net (loss) / gain on investments at fair value through profit or loss- Net unrealised gain / (loss) on revaluation of investments 5,142,227 578,503 313,655 6,034,385 3,130,362 (567,892) (199,958) 2,362,512- Net (loss) / gain on sale of investments (880,141) (78,625) (236,099) (1,194,865) 11,758,376 - - 11,758,376Dividend income 1,310,204 - - 1,310,204 674,921 - - 674,921Element of income / (loss) and capital gains / (losses) included in prices of units issued less those in units redeemed - net (3,927) 23,268 17,389 36,730 57,259 2,257 6,113 65,629Total income 5,689,480 1,391,345 850,136 7,930,961 15,776,726 739,987 1,087,117 17,603,830

ExpensesRemuneration of the Pension Fund Manager 430,318 236,160 210,832 877,310 383,293 226,574 206,314 816,181Sales tax on remuneration of the Pension Fund Manager 69,884 38,351 34,239 142,474 66,693 39,424 35,899 142,016Federal Excise Duty on remuneration of the Pension Fund Manager 68,852 37,784 33,733 140,369 61,327 36,253 33,010 130,590Remuneration of the Trustee 47,527 26,051 23,256 96,834 37,844 22,351 20,352 80,547Annual fee of the Securities and Exchange Commission of Pakistan 9,554 5,244 4,681 19,479 8,509 5,030 4,580 18,119Amortisation of premium on available-for-sale investment - 317,043 20,055 337,098 - 41,706 32,925 74,631Auditors' remuneration 35,793 35,792 35,792 107,377 34,960 34,960 34,960 104,880Securities' transaction cost 33,387 - - 33,387 213,034 585 455 214,074Custody and settlement charges 3,479 1,710 1,710 6,899 9,481 1,500 1,500 12,481Bank charges 2,956 325 369 3,650 4,629 606 1,333 6,568Printing, stationery & postage 2,581 2,576 2,578 7,735 - - - -Provision for Workers' Welfare Fund - - - - 299,143 6,621 14,318 320,082Total expenses 704,331 701,036 367,245 1,772,612 1,118,913 415,610 385,646 1,920,169

Net income for the period 4,985,149 690,309 482,891 6,158,349 14,657,813 324,377 701,471 15,683,661

Earnings per unit 23.49 1.98 1.37 69.35 0.93 1.96


----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund


Total Quarter ended December 31, 2015

EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------

Quarter ended December 31, 2014

10



11




CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2015

CASH FLOWS FROM OPERATING ACTIVITIESNet (loss) / income for the period (2,737,562) 1,482,573 1,026,261 (228,728) 19,501,382 630,440 1,202,018 21,333,840

Adjustments for:Net (gain) / loss on sale of investments 1,292,585 86,625 244,099 1,623,309 (12,655,446) - - (12,655,446)Unrealized (gain) / loss on investment in held for trading securities - net 2,353,260 (749,943) (264,555) 1,338,762 (6,164,862) 1,008,302 469,101 (4,687,459)Amortisation of premium on available - for - sale investments - 317,043 20,055 337,098 - 209,629 161,573 371,202Dividend income (2,221,920) - - (2,221,920) (2,130,219) - - (2,130,219)Provision for Workers' Welfare Fund - - - - 397,996 12,871 24,536 435,403Element of (income) / loss and capital (income) / losses included in prices of units sold less those of units redeemed - net 6,025 (22,865) (16,252) (33,092) (77,739) 2,163 (6,440) (82,016)Operating income before working capital changes (1,307,612) 1,113,433 1,009,608 815,429 (1,128,888) 1,863,405 1,850,788 2,585,305

Decrease / (Increase) in operating assetsProfit receivable on bank balances and investments 30,356 284,245 645,433 960,034 (4,835,868) 1,278 (48,432) (4,883,022)

Increase / (decrease) in liabilitiesRemuneration payable to the Pension Fund Manager 158,461 86,501 76,402 321,364 272,247 160,225 146,093 578,565Remuneration payable to the Trustee 2,085 1,289 1,072 4,446 2,447 665 549 3,661Audit fee payable 1,907 1,907 1,907 5,721 1,541 1,541 1,541 4,623Annual fee payable to the Securities and Exchange Commission of Pakistan (15,125) (9,841) (9,470) (34,436) (10,509) (7,365) (6,555) (24,429)Accrued expenses and other liabilities (594,881) (3,518,662) (3,523,136) (7,636,679) 6,432,198 (2,018) (744) 6,429,436

(447,553) (3,438,806) (3,453,225) (7,339,584) 6,697,924 153,048 140,884 6,991,856

(1,724,809) (2,041,128) (1,798,184) (5,564,121) 733,168 2,017,731 1,943,240 4,694,139

Dividend received 2,355,560 - - 2,355,560 2,130,219 - - 2,130,219

Sale / maturity of investments 51,434,426 28,308,000 49,008,000 128,750,426 150,820,701 - - 150,820,701Purchase of investments (51,862,886) (28,000,000) (15,000,000) (94,862,886) (145,421,101) (9,550,749) (8,547,250) (163,519,100)

(428,460) 308,000 34,008,000 33,887,540 5,399,600 (9,550,749) (8,547,250) (12,698,399)

Cash generated from / (used in) operating activities - net 202,291 (1,733,128) 32,209,816 30,678,979 8,262,987 (7,533,018) (6,604,010) (5,874,041)

CASH FLOWS FROM FINANCING ACTIVITIES - NETCash received on issue of units 469,511 3,628,491 3,408,902 7,506,904 2,890,626 7,192,687 5,645,974 15,729,287Cash paid on redemption of units (25,808) (2,021,882) (2,007,727) (4,055,417) - (316,861) (318,447) (635,308)Cash generated from financing activities 443,703 1,606,609 1,401,175 3,451,487 2,890,626 6,875,826 5,327,527 15,093,979

Increase / (decrease) in cash and cash equivalents - net 645,994 (126,519) 33,610,991 34,130,466 11,153,613 (657,192) (1,276,483) 9,219,938Cash and cash equivalents at the beginning of the period 4,427,379 3,229,101 2,936,736 10,593,216 5,229,997 2,440,943 3,022,023 10,692,963

Cash and cash equivalents at the end of the period 5,073,373 3,102,582 36,547,727 44,723,682 16,383,610 1,783,751 1,745,540 19,912,901


----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund


TotalHalf year ended December 31, 2015

EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------

Half year ended December 31, 2014


12


13

NOTES TO AND FORMING PART OF THE CONDENSEDINTERIM FINANCIAL INFORMATIONFOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2015 (UN-AUDITED)

1 LEGAL STATUS AND NATURE OF BUSINESS

1.1 JS Islamic Pension Savings Fund ("the Fund") has been established under the Voluntary Pension System Rules,2005 (VPS Rules) and has been approved as a pension fund by the Securities and Exchange Commission ofPakistan (SECP) on February 29, 2008. It has been constituted under a Trust Deed, dated January 8, 2008,between JS Investments Limited as the Pension Fund Manager, a company incorporated under the CompaniesOrdinance, 1984 and the Central Depository Company of Pakistan Limited as the Trustee, also incorporatedunder the Companies Ordinance, 1984. The title to the assets of the Fund is held in the name of the Trustee.The registered office of JS Investments Limited is situated at 7th Floor, The Forum, Clifton, Karachi, Pakistan.

1.2 The Fund is an open end fund and offers units for public subscription on a continuous basis. The units are non-transferable except in the circumstances mentioned in the Voluntary Pension System Rules, 2005 and can beredeemed by surrendering them to the Fund. Further, as per the offering document the Fund shall not distributeany income from the Fund whether in cash or otherwise.

1.3 The Fund's objective is to enable the participants to contribute in a diversified portfolio of securities, which areshariah compliant. Under the Trust Deed, all the conducts and acts of the Fund are based on shariah. ThePension Fund Manager has appointed a Shariah Advisory Council to ensure that the activities of the Fund arein compliance with the principles of shariah. The Shariah Advisory Council submits its report on an annual basisafter the year end. However, compliance in between the period is checked by the Pension Fund Manager'scompliance department.

1.4 The Fund consists of three sub-funds namely, JS Islamic Pension Savings Fund Equity Sub-Fund ("Equity Sub-Fund"), JS Islamic Pension Savings Fund Debt Sub-Fund ("Debt Sub-Fund") and JS Islamic Pension Savings FundMoney Market Sub-Fund ("Money Market Sub-Fund") (collectively the "Sub-Funds"). The investment policy foreach of the sub-funds include the following:

- The Equity Sub-Fund shall have a minimum investment in listed equity securities of ninety percent (90%) of itsNet Asset Value. Investment in equity securities of a single company shall not exceed 10% of net assets valueof the equity sub fund or paid-up capital of that company, which ever is lower, provided that exposure incompanies belonging to a single sector as classified by the Stock Exchange shall not exceed 30% or the indexweight, whichever is higher subject to a maximum of 35% of the net assets of Shariah compliant equity subfund.

- The assets of shariah compliant Debt Sub-Fund may be deposited in Islamic commercial banks having not lessthan "A plus" rating or islamic windows of commercial banks, having not less than "AA" rating or may be investedin islamic bonds or sukuks issued by entities either owned by Federal government or guaranteed by the FederalGovernment.

- The weighted average time to maturity of net assets of the Money Market Sub-fund shall not exceed one year.Time to maturity of any asset in the portfolio of Money Market Sub-fund such as Government Ijara Sukuks shallnot exceed 3 years.

1.5 The Fund offers four types of allocation schemes, as prescribed by the SECP under VPS rules vide its Circularno 36 of 2009 dated 10 December 2009, to the participants of the Fund, namely High Volatility, MediumVolatility, Low Volatility and Lower Volatility. The participant has the option to suggest a minimum percentageof allocation to the above allocation schemes (subject to the minimum percentages prescribed in the offeringdocument). Based on the minimum allocation, the funds are allocated to the above stated sub-funds. Theallocation to the sub-funds has to be done at the date of the opening of the participant's pension account andon an anniversary date thereafter. The contribution amount may be paid by the participant on a periodic basissuch as annual, semi annual, quarterly or monthly basis within 5 days of the close of the period.

14


2 BASIS OF PREPARATION

2.1 Statement of compliance

This condensed interim financial information has been prepared in accordance with the approved accountingstandards as applicable in Pakistan. The approved accounting standards comprise of such International FinancialReporting Standards (IFRSs) issued by the International Accounting Standards Board as are notified under theCompanies Ordinance, 1984, the requirements of the Trust Deed, the VPS Rules and the directives issued bythe SECP. Wherever the requirements of the Trust Deed, the VPS Rules or the directives issued by the SECP differwith the requirements of IFRS, the requirements of the Trust Deed, the VPS Rules or the directives issued by SECPprevail.

The disclosures made in this condensed interim financial information have, however, been limited based onthe requirements of International Accounting Standard 34: 'Interim Financial Reporting'. This condensed interimfinancial information does not include all the information and disclosures required in a full set of financialstatements and should be read in conjunction with the annual audited published financial statements of theFund for the year ended June 30, 2015.

This condensed interim financial information is being submitted to the participants as required under Regulation7(f) of the VPS Rules.

2.2 Standards, interpretations and amendments to published approved accounting standards that areeffective in the current period

The following standard and amendments to published standard are mandatory for the financial year beginningon or after January 1, 2015 and its relevant to the fund:

IFRS 13 ‘Fair Value Measurement’ establishes a single framework for measuring fair value and making disclosuresabout fair value measurements when such measurements are required or pemitted by other IFRSs. It unifies thedefinition of fair value as the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. It replaces and expands the disclosurerequirements about fair value measurements in other IFRSs, including IFRS 7 ‘Financial Instruments: Disclosures’.As a result the fund has included additional disclosures in this regard in note 13 to the condensed interimfinancial information. Notwithstanding the above, the change had no significant impacts on the measurementsof the Fund’s assets and liabilities.

The other new standards, amendments to published standards and interpretations that are mandatory for thefinancial year beginning on or after January 1, 2015 are considered not to be relevant or to have any significanteffect on the Fund’s financial reporting and operations.

2.3 Standards, interpretations and amendments to published approved accounting standards that are notyet effective

There are certain amended standards and interpretations that are mandatory for the accounting periods beginningon or after January 1, 2016 but are considered not to be relevant or will not have any significant effect on theFund's operations and are therefore not detailed in this condensed interim financial information.

Further, the following amended standard has been issued by the IASB which are yet to be notified by the SECPfor the purpose of applicability in Pakistan.

Standard

IFRS 9 - Financial Instruments: Classification and Measurement January 1, 2018

"Effective date(annual periods beginning on or after)"


15

16

EquitySub-Fund

DebtSub-Fund


TotalDecember 31, 2015 (Unaudited)

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund


TotalJune 30, 2015 (Audited)

----------------Rupees----------------Note

4. BANK BALANCES

In local currency - In profit and loss sharing accounts 4.1 5,024,118 3,102,582 36,547,727 44,674,427 4,337,949 3,229,101 2,936,736 10,503,786 - Current accounts 49,255 - - 49,255 89,430 - - 89,430

5,073,373 3,102,582 36,547,727 44,723,682 4,427,379 3,229,101 2,936,736 10,593,216

EquitySub-Fund

DebtSub-Fund



----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund


TotalJune 30, 2015 (Audited)

----------------Rupees----------------Note

5 INVESTMENTS

Investments by category

At fair value through profit or loss - held for tradingListed equity securities 5.1.1 112,369,985 - - 112,369,985 115,587,370 - - 115,587,370Government securities 5.1.2 - 61,396,400 21,169,500 82,565,900 - 45,356,800 36,675,300 82,032,100

Available for sale investmentsGovernment securities 5.2 - - - - - 16,113,600 18,636,600 34,750,200

Investments at fair value 112,369,985 61,396,400 21,169,500 194,935,885 115,587,370 61,470,400 55,311,900 232,369,670

4.1 These profit and loss sharing accounts carry profit rates ranging from 3.5% to 5.15% (June 2015 : 4.00% to5.5%) per annum.


3 SIGNIFICANT ACCOUNTING, ESTIMATES, JUDGMENTS AND RISK MANAGEMENT POLICIES

The accounting policies applied for the preparation of this condensed interim financial information are the sameas those applied in the preparation of the annual published financial statements of the Fund for the year endedJune 30, 2015.

The preparation of this condensed interim financial information in conformity with the approved accountingstandards requires management to make estimates, assumptions and use judgments that affect the applicationof policies and reported amounts of assets and liabilities and income and expenses. Estimates, assumptionsand judgments are continually evaluated and are based on historical experience and other factors, includingreasonable expectations of future events. Revisions to accounting estimates are recognised prospectivelycommencing from the period of revision.

The significant judgments made by the management in applying the accounting policies and the key sourcesof estimation uncertainty were the same as those that were applied in the audited financial statements for theyear ended June 30, 2015.

17


5.1 At fair value through profit or loss - held for trading investments

5.1.1 Listed equity securities - held by Equity Sub-Fund

Percentage ofpaid up capital

of investee company

Market Valueas Percentageof net assets

of the Sub-Fund

Marketvalue as at

December 31,2015

Cost of holdingas at 30

Decemnber 2015

December 31,2015

Sold during the

period

Purchased during the

periodJuly 1,2015

--------------Number of shares------------------ -------------Rupees-------------

Sectors / companiesOrdinary shares have a face value of Rs. 10 each unlessstated otherwise

------------% age-------------

CementD.G Khan Cement Co. Limited 31,000 18,000 - 49,000 7,210,468 7,231,910 6.32 0.01Cherat Cement Company Limited 65,000 58,000 - 123,000 10,948,040 11,092,140 9.70 0.07Fauji Cement Company Limited 60,000 70,000 - 130,000 4,597,000 4,786,600 4.18 0.01Kohat Cement Company Limited 28,300 - - 28,300 5,655,755 6,816,904 5.96 0.02

Lucky Cement Limited 4,000 7,000 - 11,000 5,994,262 5,445,440 4.76 0.003 34,405,525 35,372,994 30.92

MiscellaneousSynthetic Product Enterprises Limited 161,000 - - 161,000 8,834,070 8,613,500 7.53 0.21

Automobile AssemblerPak Suzuki Motor Limited 19,200 - - 19,200 8,369,472 9,509,760 8.31 0.02Millat Tractors Limited 250 - 250 - - - - -HinoPak Motors Limited 4,000 10,800 4,000 10,800 12,097,739 11,102,400 9.70 0.09Indus Motor Company Limited 6,600 - 6,600 - - - - -

20,467,211 20,612,160 18.01 Automobile Parts & Accessories

Agriauto Industries Limited (Face Value of Rs 5 each) - 45,300 - 45,300 8,895,833 9,377,100 8.20 0.16 Thal Limited (Face Value of Rs 5 each) 28,400 4,000 10,000 22,400 6,392,443 5,674,592 4.96 0.03 15,288,276 15,051,692 13.16

Oil & gas marketing companiesAttock Petroleum Limited 6,500 - - 6,500 3,686,930 3,283,280 2.87 0.01Pakistan State Oil Company Limited 16,500 - - 16,500 6,365,535 5,375,205 4.70 0.01

10,052,465 8,658,485 7.57 Oil & gas exploration companiesPakistan Petroleum Limited 30,900 - 30,900 - - - - -Pakistan Oilfields Limited 16,600 - 16,600 - - - - -

- - - ChemicalsSitara Chemical Industries Limited 9,000 - - 9,000 2,701,800 3,240,000 2.83 0.04

18


Food & Personal Care Products Rafhan Maize Products Company Limited 993 - - 993 10,106,258 8,986,650 7.86 0.01

Personal GoodsENGRO Corporation Limited 17,900 8,000 25,900 - - - -

RefineryAttock Refinery Limited 25,800 - 25,000 800 182,760 169,504 0.15 0.001

Textile CompositeNishat Mills Limited 48,900 50,000 48,900 50,000 5,177,500 4,743,500 4.15 0.001

PharmaceuticalsAbbott Laboratories (Pakistan) Limited - 10,900 - 10,900 7,507,380 6,921,500 6.05 0.01

Commercial Banks Meezan Bank Limited 175,000 - 175,000 - - - - -

Total Value as at December 31, 2015 114,723,245 112,369,985

Total Value as at June 30, 2015 111,218,773 115,587,370

Percentage ofpaid up capital

of investee company


of the Sub-Fund

Marketvalue as at

December 31,2015

Cost of holdingas at 30

Decemnber 2015

December 31,2015

Sold during the

period


periodJuly 1,2015

--------------Number of shares------------------ -------------Rupees-------------

Sectors / companiesOrdinary shares have a face value of Rs. 10 each unlessstated otherwise

------------% age-------------

Held by Debt Sub-FundIjarah Sukuk IX 1,000 - 1,000 - - - -Ijarah Sukuk XI 900 - 900 - - - -Ijarah Sukuk XII 560 - 560 - - - -Ijarah Sukuk XIV 4,000 - - 4,000 19,852,409 20,080,000 31.36Ijarah Sukuk XV 2,600 - - 2,600 12,794,048 13,000,000 20.30Ijarah Sukuk XVI - 5,600 - 5,600 28,000,000 28,316,400 44.22Total value as at December 31, 2015 60,646,457 61,396,400 95.88

Total value as at June 30, 2015 45,652,929 45,356,800 74.26

Held by Money Market Sub-FundIjarah Sukuk IX 1,000 - 1,000 - - - -Ijarah Sukuk X 4,000 - 4,000 - - - -Ijarah Sukuk XI 700 - 700 - - - -Ijarah Sukuk XII 400 - 400 - - - -Ijarah Sukuk XV 1,200 - - 1,200 5,904,945 6,000,000 10.50Ijarah Sukuk XVI - 3,000 - 3,000 15,000,000 15,169,500 26.55Total value as at December 31, 2015 20,904,945 21,169,500 37.05



of the Sub-Fund

Marketvalue as at

December 31,2015

Cost of holding

"As at December31, 2015"Sold / matured

duringthe period


period

As atJuly 1, 2015

------------------------------------Number------------------------------------ -------------- Rupees --------------

5.1.2 Government Securities - Held for trading


19

5.1.3 Significant terms and conditions of sukuk certificates held as at December 31, 2015 are as follows:

Name Expected Profit Issue Maturity Security

Held by Debt sub-fundIjarah Sukuk XIV 6.1523% 28-Mar-13 28-Mar-16 GoP GuaranteedIjarah Sukuk XV 4.7496% 25-Jun-14 25-Jun-17 GoP GuaranteedIjarah Sukuk XVI 5.8946% 18-Dec-15 18-Dec-18 GoP Guaranteed

Held by Money Market sub-fundIjarah Sukuk XV 4.7496% 25-Jun-14 25-Jun-17 GoP GuaranteedIjarah Sukuk XVI 5.8946% 18-Dec-15 18-Dec-18 GoP Guaranteed

Held by Debt Sub-FundIjarah Sukuk IX 800 - 800 - - - -Ijarah Sukuk XIII 2,400 - 2,400 - - - -Total value as at December 31, 2015 - - -


Held by Money Market Sub-FundIjarah Sukuk IX 1,800 - 1,800 - - - -Ijarah Sukuk XIII 1,900 - 1,900 - - - -Total value as at December 31, 2015 - - -



of the Sub-Fund

Marketvalue

Cost of holding

"As at December31, 2015"

Sold / matured during

the period


period

As atJuly 1, 2015

------------------------------------Number------------------------------------ -------------- Rupees --------------

Remuneration payable(including sales tax and FED on remuneration of the Pension Fund Manager) 6.1 792,371 465,581 422,068 1,680,020

EquitySub-Fund

DebtSub-Fund

MoneyMarket

Sub-Fund

December 31, 2015 (Unaudited)

Total ----------------- Rupees -----------------6 REMUNERATION PAYABLE TO THE PENSION FUND MANAGER

Note

Remuneration payable(including sales tax and FED on remuneration of the Pension Fund Manager) 633,910 379,080 345,666 1,358,656

EquitySub-Fund

DebtSub-Fund

MoneyMarket

Sub-Fund

June 30, 2015 (Audited)

Total ----------------- Rupees -----------------

5.2 Government Securities -Available for sale investments

20


6.1 The Finance Act, 2013 had enlarged the scope of Federal Excise Duty (FED) on financial services to includeAsset Management Companies (AMCs) with effect from June 13, 2013. As the asset management servicesrendered by the Pension Fund Manager of the Fund are already subject to provincial sales tax on services leviedby the Sindh Revenue Board, which is being charged to the Fund, the Pension Fund Manager is of the view thatfurther levy of FED is not justified.

On 4 September 2013, a Constitutional Petition had been filed in the Honorable Sindh High Court (SHC) jointlyby various asset management companies, together with their representative Collective Investment Schemesthrough their trustees, challenging the levy of FED. In this respect, the Honorable SHC has issued a stay orderagainst recovery proceedings. The hearing of the petition is pending.

Pending the decision of the SHC, the Fund has stopped making payments for FED since September, 2013. Asa matter of prudence the Fund has made full provision of Rs. 1.17 million (June 30, 2015: Rs. 0.89 million)in this condensed interim financial information.

7. ACCRUED EXPENSES AND OTHER LIABILITIES

Zakat payable - 1,330 1,530 2,860 - 1,330 1,530 2,860Payable to broker against settlement / Brokerage Payable 320,646 - - 320,646 888,978 - - 888,978Payable against redemption of units - - - - - 3,521,624 3,526,098 7,047,722Settlement charges payable 713 570 570 1,853 1,324 500 500 2,324Payable against purchase of printing and stationary 2,892 2,892 2,892 8,676 - - - -Provision against contribution to Workers' Welfare Fund 7.1 2,126,229 476,868 374,868 2,977,965 2,126,229 476,868 374,868 2,977,965Haram income payable to charitable trust 48,491 - - 48,491 77,321 - - 77,321

2,498,971 481,660 379,860 3,360,491 3,093,852 4,000,322 3,902,996 10,997,170

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund



EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------


7.1 Provision against contribution to Workers' Welfare Fund

The Finance Act, 2008 introduced an amendment to the Workers' Welfare Fund Ordinance, 1971 (WWFOrdinance). As a result of this amendment it may be construed that all Collective Investment Schemes / mutualfunds (CISs) / pension funds, whose income exceeds Rs 0.5 million in a tax year, have been brought within thescope of the WWF Ordinance, thus rendering them liable to pay contribution to WWF at the rate of two percentof their accounting or taxable income, whichever is higher. In this regard, a constitutional petition has beenfiled by certain CISs through their trustees in the Honourable High Court of Sindh (the Court), challenging theapplicability of WWF to the CISs / pension funds, which is pending for adjudication.

During the year ended June 30, 2011, a clarification was issued by the Ministry of Labour and Manpower (theMinistry) which stated that mutual funds are not liable to contribute to WWF on the basis of their income.However, on December 14, 2010, the Ministry filed its response against the constitutional petition requestingthe Court to dismiss the petition. According to the legal counsel who is handling the case there is a contradictionbetween the aforementioned clarification issued by the Ministry and the response filed by the Ministry in theCourt.

During the year ended June 30, 2012, the Honourable Lahore High Court (LHC) in a Constitutional Petitionrelating to the amendments brought in the WWF Ordinance, 1971 through the Finance Act, 2006 and theFinance Act, 2008, had declared the said amendments as unlawful and unconstitutional. In March 2013, alarger bench of the Honourable Sindh High Court (SHC) passed an order declaring that the amendmentsintroduced in the WWF Ordinance, 1971 through the Finance Act, 2006 and the Finance Act, 2008 do notsuffer from any constitutional or legal infirmity. However, the Honourable High Court of Sindh has not addressedthe other amendments made in the WWF Ordinance, 1971 about applicability of WWF to the CISs which isstill pending before the Court.

Note

21


In a judgment of May 2014, the Peshawar High Court (PHC) has also held these amendments to be ultra viresas they lacked the essential mandate to be introduced and passed through the Money Bill under the constitution.For CISs and Pension Funds the issue of chargeability or otherwise of WWF levy to the CISs pension schemes,is currently, pending before the Honorable SHC. Effective July 01, 2015, The Finance Act, 2015 has excludedmutual funds and Collective Investment Schemes from the definition of 'Industrial establishment' subject to WWFunder WWF Ordinance, 1971. The provision made till June 30, 2015 has not been reversed as the abovepetition is still pending in the SHC.

The Pension Fund Manager in consultation with the legal counsel has considered the implications of the abovejudgment of SHC and is of the view that the matter will eventually be settled in its favour and WWF will not belevied on the Fund. Without prejudice to the above, the Pension Fund Manager, as a matter of prudence andabundant caution, has made provision for WWF amounting to Rs. 2.98 million untill June 30, 2015 in thiscondensed interim financial information as follows:

Aggregate recognised amount of WWF 2,126,229 476,868 374,868 2,977,965

EquitySub-Fund

DebtSub-Fund

MoneyMarket

Sub-Fund


Total ----------------- Rupees -----------------

Had the provision not been made the net asset value per unit of the Sub-Funds would have been higher by Rs.10.02 (June 30, 2015: Rs. 10.06) for Equity Sub-Fund, Rs 1.37 (June 30, 2015: Rs. 1.40) for Debt Sub-Fundand Rs 1.06 (June 30, 2015: Rs. 1.09) for Money Market Sub-Fund.

8 TAXATION

The Fund does not make provision for taxation in view of the exemption available under clause 57 (3) (viii) ofPart-1 of the 2nd Schedule to the Income Tax Ordinance, 2001.

9 CONTINGENCIES AND COMMITMENTS

The Fund has no contingency or commitment as at period ended December 31, 2015 and June 30, 2015.

10 CONTRIBUTION TABLE

Contribution received during the period / year

Aggregate recognised amount of WWF 2,126,229 476,868 374,868 2,977,965

EquitySub-Fund

DebtSub-Fund

MoneyMarket

Sub-Fund


Total ----------------- Rupees -----------------

22


EquitySub-Fund

DebtSub-Fund


Total


Units (Rupees) Units (Rupees) Units (Rupees) (Rupees)From:Individuals 863 469,511 19,905 3,628,491 21,161 3,408,902 7,506,904

EquitySub-Fund

DebtSub-Fund


Total


Units (Rupees) Units (Rupees) Units (Rupees) (Rupees)From:Individuals 18,875 3,312,348 197,194 9,403,780 190,219 7,645,061 20,361,189

11 NUMBER OF UNITS IN ISSUE


EquitySub-Fund

DebtSub-Fund

MoneyMarket

Sub-FundEquity

Sub-FundDebt

Sub-Fund

MoneyMarket

Sub-Fund----------------------------------(Number of units)----------------------------------


Total units outstanding at the beginning of the period / year 211,423 339,501 344,074 204,634 307,488 323,641Units issued during the period / year 863 19,905 21,161 18,875 197,194 190,219Units redeemed during the period / year (48) (11,101) (12,474) (12,086) (165,181) (169,786)Total units in issue at the end of the period / year 212,238 348,305 352,761 211,423 339,501 344,074

12 TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS

Related parties / connected persons include JS Investments Limited being the Pension Fund Manager, the CentralDepository Company of Pakistan Limited being the Trustee, JS Bank Limited being the holding company of thePension Fund Manager, Jahangir Siddiqui and Co. Limited being the holding company of JS Bank Limited (JSBL),JS Global Capital Limited (which is a fellow subsidiary of JSBL), associates of the Pension Fund Manager andits holding company, other funds being managed by the Pension Fund Manager and the Key ManagementPersonnel.

12.1 Details of transactions with with related parties / connected person are as follows:

JS Investments Limited (Pension Fund Manager)

Remuneration for the period 871,540 468,690 419,197 1,759,427 714,631 446,735 407,131 1,568,497Sales tax on Pension Fund Manager's remuneration 141,538 76,115 68,078 285,731 124,346 77,732 70,840 272,918Federal Excise Duty on Pension Fund Manager's remuneration 139,446 74,990 67,072 281,508 114,341 71,479 65,141 250,961Front end fee 160 66 14 240 14,339 10,991 2,660 27,990Expenses incurred 35,978 35,974 35,974 107,926 67,144 67,144 67,145 201,433

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund



EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------

Half year ended December 31, 2014Un-Audited Un-Audited

23


Central Depository Company of Pakistan Limited (Trustee)Remuneration expense 97,828 52,565 47,014 197,407 71,145 44,480 40,537 156,162Settlement charges 8,745 3,420 3,420 15,585 14,386 3,000 3,000 20,386

JS Global Capital LimitedBrokerage expense 12.1.1 20,697 - - 20,697 27,619 - - 27,619

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund



EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------

Half year ended December 31, 2014Un-Audited Un-Audited

Note

12.1.1 This represents the amount of brokerage paid to the related party and not the purchase or sale value of securitiestransacted through them. The purchase or sale value have not been treated as transactions with related partyas the ultimate counter-parties are not known.

12.2 Details of balances of the Fund held with related parties / connected person as at period / year end:

JS Investments Limited (Pension Fund Manager)Remuneration payable (including sales tax and FED onremuneration of the Pension Fund Manager) 792,371 465,581 422,068 1,680,020 633,910 379,080 345,666 1,358,656Amount held in participants' Sub Funds 107,810,000 39,312,357 35,999,807 183,122,164 110,390,000 38,471,920 35,437,380 184,299,300Units held in participants' Sub Funds Number 200,000 213,852 222,303 636,155 200,000 213,852 222,303 636,155

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund


TotalHalf year ended December 31, 2015 (Unaudited)

EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------


Note

Central Depository Company of Pakistan Limited (Trustee)Remuneration payable 16,329 9,209 8,223 33,761 14,244 7,920 7,151 29,315Settlement charges payable 713 570 570 1,853 1,324 500 500 2,324Security deposit 100,000 100,000 100,000 300,000 100,000 100,000 100,000 300,000

Key management personnelAmount received on issue of units - 7,417 11,281 18,698 - 7,259 11,105 18,364Units Held Number - 40 70 110 - 40 70 110

----------------Rupees----------------

EquitySub-Fund

DebtSub-Fund


TotalHalf year ended December 31, 2015 (Unaudited)

EquitySub-Fund

DebtSub-Fund


Total

----------------Rupees----------------


Note

12.3 The transactions with related parties / connected persons are in the normal course of business at contractedrates and terms

13 FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeablewilling parties in an arm's length transaction. Consequently, differences can arise between carrying values andthe fair value estimates.

Underlying the definition of fair value is the presumption that the Fund is a going concern without any intentionor requirement to curtail materially the scale of its operations or to undertake a transaction on adverse terms.

Fair value of investments is determined as follows:- Fair value of listed equity securities is determined on the basis of closing market prices quoted on the

respective stock exchange.

- Investments in government securities are valued on the basis of average rates of brokers as announcedby the Financial Markets Association of Pakistan.

24


13.1 Fair value hierarchy

International Financial Reporting Standard 13, ‘Fair Value Measurment’ requires the Funds to classify assetsusing a fair value hierarchy that reflects the significance of the inputs used in making the measurments. Thefair value hierarchy has the following levels:

Level 1: Fair value measurements using quoted price (unadjusted) in an active market for identical assets orliabilities.

Level 2: Fair value measurements using inputs other than quoted prices included within level 1 that are observablefor the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Fair value measurement using inputs for the asset or liability that are not based on observable marketdata (i.e. unobservable inputs).

As at 31 December 2015, the fund held the following financial instruments measured at fair value.

Level 1 Level 2 Level 3

December 31, 2015 (Unaudited)Equity Sub-Fund

Total

At fair value through profit or loss - held for tradingListed equity securities 112,369,985 - - 112,369,985

----------------- Rupees -----------------

- Listed and unlisted debt securities, other than government securities, are valued on the basis of pricesannounced by the Mutual Funds Association of Pakistan (MUFAP), as per the method of valuation agreedwith the Trustees of the Fund under the Rules. The MUFAP calculates these prices in accordance with theSECP's Circular 1 of 2009. The said circular prescribes a valuation methodology which in case of currentlytraded securities, is based on weighted average prices during the 15 days preceding the valuation dateand in case of thinly or non-traded securities, on the basis of discount coupon method which takes intoconsideration credit risk and maturities of the instruments.

- The fair value of all other financial assets and financial liabilities of the Fund approximate their carryingamounts due to short term maturities of these instruments.

At fair value through profit or loss - held for tradingGovernment securities - GOP Ijarah Sukuks - 61,396,400 - 61,396,400


December 31, 2015 (Unaudited)Equity Sub-Fund

Total

----------------- Rupees -----------------

25




December 31, 2015 (Unaudited)Money Market Sub-Fund

Total

----------------- Rupees -----------------


June 30, 2015 (Audited)Equity Sub-Fund

Total

----------------- Rupees -----------------At fair value through profit or loss - held for tradingListed equity securities 115,587,370 - - 115,587,370

June 30, 2015 (Audited)Debt Sub-Fund

Level 1 Level 2 Level 3 Total

----------------- Rupees -----------------At fair value through profit or loss - held for tradingGovernment securities - GOP Ijarah Sukuks - 45,356,800 - 45,356,800

Available-for-sale investmentsGovernment securities - GOP Ijarah Sukuks - 16,113,600 - 16,113,600

----------------- Rupees -----------------


June 30, 2015 (Audited)Money Market Sub-Fund

Total


Available-for-sale investmentsGovernment securities - GOP Ijarah Sukuks - 18,636,600 - 18,636,600

14 DATE OF AUTHORIZATION FOR ISSUE

This condensed interim financial information was authorized for issue on February 17, 2016 by the Board ofDirectors of the Pension Fund Manager.


DirectorChief Executive Officer

Ali Akhtar Ali Nazar Mohammad Shaikh

26


15 GENERAL

15.1 Figures have been rounded off to the nearest rupees.

15.2 This condensed interim financial information is unaudited and has been reviewed by the auditors. Further, thefigures for the quarters ended December 31, 2014 and December 31, 2015 in this condensed interim financialinformation have not been reviewed by the auditors.

15.3 Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of betterpresentation. No significant reclassifications have been made during the current period.

js islamic pension savings fund - js investments · 2016-02-26 · audited financial statements of...

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