FMTSF FUNDS 2018 Shahzaib · Mr. Osman Khan, Chairman Syed Ibad-Ur-Rehman Chishti, Member Mr....

Financial Statements for the year ended June 30, 2018

MTS Fund

Faysal MTS FundFaysal MTS Fund (FMTSF) is an open Ended Mutual Fund seeks to provide competitive returns primarily through investment into MTS market.

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Statement of Comprehensive Income

EY Ford Rhodes, CharteredAccountants

Faysal Asset Management Limited

Mr. Salman Ahmed Usmani, ChairmanMr. Osman Khan, DirectorSyed Ibad-Ur-Rehman Chishti, DirectorMr. Tahir Yaqoob Bhatti, DirectorMr. Farooq Hassan, DirectorMr. Razi-ur-Rahman Khan, Director/CEO

Mr. Naved Hanif

Mr. Osman Khan, ChairmanSyed Ibad-ur-Rehman Chishti, MemberMr. Farooq Hassan, Member

Chief Executive OfficerMr. Razi-ur-Rahman Khan

Chief Financial Officerand Company Secretary of theManagement Company

Mr. Osman Khan, ChairmanSyed Ibad-Ur-Rehman Chishti, MemberMr. Razi-ur-Rahman Khan, Member

HR Committee

Central Depository Company of Pakistan Limited,

JWAFFS Registrar Service (Pvt) Limited407-408, Al-Ameera Centre,Shahrah-e-Iraq, Saddar, Karachi.

Soneri Bank LimitedBank Alfalah LimitedFaysal Bank LimitedHabib Bank LimitedJS Bank LimitedZarai Taraqiati Bank Limited

Faysal Asset Management Faysal MTS Fund04

Faysal MTS Fund (FMTSF) endeavours to provide investors competitive returns primarily through investment into MTS market.

Faysal Asset Management Faysal MTS Fund 05

REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANY

The Directors of Faysal Asset Management Limited, the Management Company of Faysal MTS Fund (FMTSF), are pleased to present the Annual Report on the operations of FMTSF along with the audited accounts, Reports of the Trustee and Auditors to the unit holders for the period ended June 30, 2018.

SALE AND REDEMPTION OF UNITS

During the year, units worth Rs.1,177.070 million were issued and units with a value of Rs.724.722 million were redeemed.

UNIT HOLDERS

As of June 30, 2018, total units outstanding were 6,081,452 units with a value of Rs.644.276 million (June 30, 2017: 1,720,905 units with a value of Rs.172.598 million).

UNIT PRICES

Unit prices are being announced on a daily basis based on the NAV of the underlying portfolio. The highest and lowest offer / redemption prices during the period as well as the prices prevailing as of June 30, 2018 were as below:

Offer Price Redemption PriceHighest 108.06 105.94Lowest 101.32 100.31As of June 30, 2018 108.06 105.94

ECONOMIC OUTLOOK

Economy of Pakistan managed to post thirteen year highest growth rate of 5.79% during the period Fiscal Year 2018 (FY18). All the three main sectors namely Service, Industrial and Agriculture contributed to economic growth. Better energy supply relative to last year coupled with capacity expansions helped the Large Scale Manufacturing (LSM) units to post growth of 5.38% during FY18 which also provided support to higher economic growth. However, balance of payment crisis persisted as financing failed to cover higher current and fiscal account deficits which also kept the foreign exchange reserves under enormous pressure throughout the year. During the period FY18, currency witnessed multiple rounds of depreciation whereas Central Bank also opted to go for monetary tightening.

In order to support higher economic activity, imports remained on the higher side during the period FY18 and stood at USD 55.85bn as compared to USD 48.68bn in the same period last year, witnessing a growth of 14.71% on Year-on-Year (YoY) basis. Exports also picked up pace by the year end on account of multiple developments to encourage exports and stood at USD 24.77bn during FY18 vis-à-vis USD 22.00bn during FY17, depicting a upsurge of 12.58% on YoY basis. Ever increasing import resulted in widening trade deficit by 16.47% on YoY basis and stood at USD 31.07bn during the period under review.

During the period FY18, remittances remained muted with USD 19.63bn vis-à-vis USD 19.35bn with meager increase of 1.42% on YoY basis. Higher trade deficit with no support from remittances kept the current account deficit elevated which recorded at USD 18.13bn during FY18 versus USD 12.62bn during FY17, augmented by 43.65% on YoY basis. Foreign Direct Investment (FDI) stood at USD 2.77bn during the period FY18 compared to USD 2.75bn in the same period last year, posting a marginal growth of 0.76%. Fiscal Deficit for the period FY18 also remained on the higher side and recorded highest deficit of PKR 2.26trn (6.60% of GDP) due to expansionary fiscal policies in an election year.

Massive twin deficits coupled with lack of major foreign inflows dragged foreign exchange reserves to precariously low levels of USD 16.41bn at the end of June 2018 from USD 21.40bn at the end of June 2017, showing a decline of 23.34% on YoY basis. Due to pressure on foreign exchange reserves, currency witnessed multiple rounds of depreciation and stood at PKR 121.49 against greenback with cumulatively devaluation of 15.87% during the period under review. Whereas, Consumer Price Index (CPI) inflation remained under control with average inflation clocked-in at 3.92% for FY18 as compared to 4.16% for FY17. In order to avoid overheating of the economy, Central Bank increased the policy rates by 75 basis points (bps) during the period FY18.

Moving forward, government’s stance to implement economic & structural reforms and to improve ties with regional & major global countries is expected to bode well for the economic wellbeing of the country and may be helpful in obtaining foreign inflows. Further, positive development related to engaging with IMF for another bailout package will be needed to provide support to diminishing reserves in recent balance of payment crisis and will provide economic stability in the future.



MONEY MARKET REVIEW

Market remained short of liquidity during the FY18 and to accomplish this liquidity shortage SBP conducted 76 OMO – Injections where the total participation stood at PKR 65.59trn and total accepted amount was PKR 61.80trn and the weighted average rate of all OMO – Injections was 5.89%. State bank also conducted 10 OMO Mop-Ups during FY’18 where total accepted amount stood at PKR 1.66trn.

Central bank conducted 27 T-bill auctions during FY18, where in cut offs were maintained at 3M – 5.9910% and 6M – 6.0109% till monetary policy was revised at the end of January; the new Cut offs were 3M – 6.2144%. During calendar year 2018 monetary policy has been revised and rates have been hiked by 175bps. This led T-bills to settle at 3M – 6.7596% and 6M – 6.8545%. The total amount realized was PKR 18,324bn against the target of PKR 17,825bn.

During FY18 SBP conducted 12 auctions. The state bank rejected all bids for 08 auctions except for July’17, April’18, May’18 and June’18, however participation and accepted amount remained at lower end.

GoP also issued two floating rate bonds where total participation stood at 296bn, against a total target of 100bn; however total accepted amount closed at 34.62bn at a spread of 50bps.

SBP issued 6 monetary policies in which it maintained its policy rate at 5.75% in first 3 auctions on the back of broad-based pick-up in the industrial output, gains in factors supporting the production of major crops, growth in private-sector credit alongside strong up-rise in Tax collection in first half of this fiscal year. However SBP decided to change the rate by 25bps in January auction and 50bps in May auction, thereby raising the yields on all available debt instruments. SBP’s this move was strongly supported by ~15% to 20% rupee depreciation during same period.

PERFORMANCE REVIEW

FMTSF yielded return of 5.63% during the FY18. By the end of FY18, your fund’s exposure in Margin Trading System (MTS) was 46.98%. Going forward, your fund would keep exploring the MTS market to yield higher returns.

ASSET ALLOCATION AS AT JUNE 30, 2018

Cash 41.51%

T-Bills4.52%

Others includingReceivables 6.98%

Margin TradingSystem (MTS)

46.98%



INCOME DISTRIBUTION

The Board of Directors has approved final distribution / payout (for full year) at the rate of 5.35% (i.e. Rs.5.37 per unit) for the year ended June 30, 2018.

MUTUAL FUND RATING

The Pakistan Credit Rating Agency Limited (PACRA) has assigned a "A+(f)" stability rating to FMTSF as of June 20, 2018.

PATTERN OF UNIT HOLDING

The pattern of unit holding as at June 30, 2018 of FMTSF is given as part of this Annual Report.

AUDITORS

The present auditors Messers EY Ford Rhodes, Chartered Accountants retire and, being eligible, offer themselves for re-appointment. The Board endorses the recommendation of the Audit Committee for re-appointment of Messers EY Ford Rhodes, Chartered Accountants as the auditors for the year ending June 30, 2019.

ACKNOWLEDGEMENT

The Board of Directors of the Management Company is thankful to unit holders for their confidence on the Management, the Securities and Exchange Commission of Pakistan and the management of Pakistan Stock Exchange Limited for their valuable support, assistance and guidance. The Board also thanks the employees of the Management Company and the Trustee for their dedication and hard work.

For and on behalf of the Board

Razi-ur-Rahman KhanKarachi: September 19, 2018 Chief Executive Officer


FUND MANAGER’S REPORT

ECONOMIC REVIEW

Economy of Pakistan managed to post thirteen year highest growth rate of 5.79% during the period Fiscal Year 2018 (FY18). All the three main sectors namely Service, Industrial and Agriculture contributed to economic growth. Better energy supply relative to last year coupled with capacity expansions helped the Large Scale Manufacturing (LSM) units to post growth of 5.38% during FY18 which also provided support to higher economic growth. However, balance of payment crisis persisted as financing failed to cover higher current and fiscal account deficits which also kept the foreign exchange reserves under enormous pressure throughout the year. During the period FY18, currency witnessed multiple rounds of depreciation whereas Central Bank also opted to go for monetary tightening.

In order to support higher economic activity, imports remained on the higher side during the period FY18 and stood at USD 55.85bn as compared to USD 48.68bn in the same period last year, witnessing a growth of 14.71% on Year-on-Year (YoY) basis. Exports also picked up pace by the year end on account of multiple developments to encourage exports and stood at USD 24.77bn during FY18 vis-à-vis USD 22.00bn during FY17, depicting a upsurge of 12.58% on YoY basis. Ever increasing import resulted in widening trade deficit by 16.47% on YoY basis and stood at USD 31.07bn during the period under review.

During the period FY18, remittances remained muted with USD 19.63bn vis-à-vis USD 19.35bn with meager increase of 1.42% on YoY basis. Higher trade deficit with no support from remittances kept the current account deficit elevated which recorded at USD 18.13bn during FY18 versus USD 12.62bn during FY17, augmented by 43.65% on YoY basis. Foreign Direct Investment (FDI) stood at USD 2.77bn during the period FY18 compared to USD 2.75bn in the same period last year, posting a marginal growth of 0.76%. Fiscal Deficit for the period FY18 also remained on the higher side and recorded highest deficit of PKR 2.26trn (6.60% of GDP) due to expansionary fiscal policies in an election year.

Massive twin deficits coupled with lack of major foreign inflows dragged foreign exchange reserves to precariously low levels of USD 16.41bn at the end of June 2018 from USD 21.40bn at the end of June 2017, showing a decline of 23.34% on YoY basis. Due to pressure on foreign exchange reserves, currency witnessed multiple rounds of depreciation and stood at PKR 121.49 against greenback with cumulatively devaluation of 15.87% during the period under review. Whereas, Consumer Price Index (CPI) inflation remained under control with average inflation clocked-in at 3.92% for FY18 as compared to 4.16% for FY17. In order to avoid overheating of the economy, Central Bank increased the policy rates by 75 basis points (bps) during the period FY18.

Moving forward, government’s stance to implement economic & structural reforms and to improve ties with regional & major global countries is expected to bode well for the economic wellbeing of the country and may be helpful in obtaining foreign inflows. Further, positive development related to engaging with IMF for another bailout package will be needed to provide support to diminishing reserves in recent balance of payment crisis and will provide economic stability in the future.

MONEY MARKET REVIEWMarket remained short of liquidity during the FY18 and to accomplish this liquidity shortage SBP conducted 76 OMO – Injections where the total participation stood at PKR 65.59trn and total accepted amount was PKR 61.80trn and the weighted average rate of all OMO – Injections was 5.89%. State bank also conducted 10 OMO Mop-Ups during FY’18 where total accepted amount stood at PKR 1.66trn.

Central bank conducted 27 T-bill auctions during FY18, where in cut offs were maintained at 3M – 5.9910% and 6M – 6.0109% till monetary policy was revised at the end of January; the new Cut offs were 3M – 6.2144%. During calendar year 2018 monetary policy has been revised and rates have been hiked by 175bps. This led T-bills to settle at 3M – 6.7596% and 6M – 6.8545%. The total amount realized was PKR 18,324bn against the target of PKR 17,825bn.

During FY18 SBP conducted 12 auctions. The state bank rejected all bids for 08 auctions except for July’17, April’18, May’18 and June’18, however participation and accepted amount remained at lower end.

GoP also issued two floating rate bonds where total participation stood at 296bn, against a total target of 100bn; however total accepted amount closed at 34.62bn at a spread of 50bps.

SBP issued 6 monetary policies in which it maintained its policy rate at 5.75% in first 3 auctions on the back of broad-based pick-up in the industrial output, gains in factors supporting the production of major crops, growth in private-sector credit alongside strong up-rise in Tax collection in first half of this fiscal year. However SBP decided to change the rate by 25bps in January auction and 50bps in May auction, thereby raising the yields on all available debt instruments. SBP’s this move was strongly supported by ~15% to 20% rupee depreciation during same period.


FUND MANAGER’S REPORT

Fund Type Open EndedCategory Income schemeStability Rating "A+"f (PACRA)Risk Profile ModerateLaunch Date April 8, 2016Custodian/Trustee CDCAuditor EY Ford Rhodes, Chartered AccountantsManagement Fee 1.00%Front/Back end Load FEL up to 2% of NAV & BEL 0%Min Subscription PKR. 5,000Benchmark Six months KIBOR ratesPricing Mechanism ForwardDealing Days Monday-FridayCut-Off Timing 9am-5pmAMC Rating AM3 (JCRVIS)NAV per Unit (PKR) 105.94Net Assets(PKR mn) 644.28Leverage Nil

June 18 June 17YTD 5.63% 6.14%Benchmark (YTD) 6.35% 6.10%

PERFORMANCE

Faysal MTS Fund yielded return of 5.63% during the FY18. By the end of FY18, your fund’s exposure in Margin Trading System (MTS) was 46.98%. Going forward, your fund would keep exploring the MTS market to yield higher returns.

Fund Information

Fund Returns (% p.a.)

Assets Quality

Assets Allocation

Government Securities 4.52%

AAA6.25% AA+

0.01%

AA0.47%

AA-34.78%

MTS(Unrated)

46.98%

NR6.98%

Cash 41.51%

T-Bills4.52%


46.98%


Note : Funds returns computed on Simple annualized basis / NAV to NAV Returns with dividend re-invested.• Performance data does not include cost incurred by investor in the form of sales load.


We Central Depository Company of Pakistan Limited, being the Trustee of Faysal MTS Fund (the Fund) are of the opinion that Faysal Asset Management Limited being the Management Company of the Fund has in all material respects managed the Fund during the year ended June 30, 2018 in accordance with the provisions of the following:

As highlighted in our previous Report dated February 28, 2018 for the six months period ended December 31, 2017, with respect to the limitations imposed on the investment powers of the Management Company under the constitutive documents of the Fund, the Management Company has not complied during the period with the requirement of Clause 2.1.1 of Offering Document pertaining to MTS which requires, "Minimum 70 % will be maintained based on quarterly average investment calculated on daily basis" and the fund was invested in MTS to the extent of 50% only. The issue was taken up with the Management Company and we were informed that due to lower market size and competitive environment in MTS, they were unable to comply with the aforesaid requirement. The matter was already reported to the Commission. However, Management Company has complied with the above mentioned requirement on January 30, 2018.

TRUSTEE REPORT TO THE UNIT HOLDERSFAYSAL MTS FUND

Report of the Trustee pursuant to Regulation 41(h) and clause 9 of Schedule V of he Non-Banking Finance Companies and Notified Entities Regulations, 2008

The pricing, issuance and redemption of units are carried out in accordance with the requirements of the constitutive documents of the Fund; and

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.

(i)

(ii)

Karachi: September 27, 2018

Head O�ce:CDC House, 99-B, Block 'B', S.M.C.H.S., Main Shahra-e-Faisal, Karachi - 74400, Pakistan.Tel: (92-21) 111-111-500Fax: (92-21) 34326020 - 23URL: www.cdcpakistan.comEmail: [email protected]


INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION

We have audited the financial statements of Faysal MTS Fund (the Fund), which comprise the statement of assets and liabilities as at June 30, 2018, and the income statement, statement of comprehensive income, cash flows statement and statement of movement in unit holders’ fund for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, (or give a true and fair view of) the financial position of the Fund as at June 30, 2018, and of its financial performance and its cash flows for the year then ended in accordance with the accounting and reporting standards as applicable in Pakistan.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Fund in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

OF FAYSAL MTS FUND


KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

As disclosed in note 4.2 to the accompanying financial statements of the Fund for the year ended 30 June 2018, the Securities and Exchange Commission of Pakistan through its SRO no. 756(I)/2017 dated 03 August 2017 made certain amendments in the Non-Banking Finance Companies and Notified Entities Regulation, 2008 (the NBFC Regulations).

These amendments are considered significant to our audit because application of the said amendments resulted in change in accounting policy relating to presentation “element of income / loss” in the financial statements and certain additional disclosures with respect to 'Income Statement' and 'Statement of Movement in Unit Holders' Fund' (the Statements).

We assessed the appropriateness of the recognition, measurement and presentation of “element of income / loss” in accordance with the amended provisions of the NBFC Regulations. We also considered the guidelines issued by MUFAP in respect of the accounting for element of income / loss as per the revised Regulations and assessed its implementation by the Fund.

We evaluated the adequacy of disclosures regarding the change in accounting policy with respect to element of income / loss in accordance with the requirements of the relevant financial reporting standards and the guidance issued by MUFAP in relation thereto.

OTHER INFORMATION

Management is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditors’ report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND BOARD OF DIRECTORS FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of the financial statements in

a) Amendment to the NBFC Regulations, 2008



accordance with accounting and reporting standards as applicable in Pakistan, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Management is responsible for assessing the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Fund’s financial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to



the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the financial statements have been prepared in accordance with the relevant provisions of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 and the Non-Banking Finance Companies and Notified Entities Regulation, 2008.

The engagement partner on the audit resulting in this independent auditor’s report is Shaikh Ahmed Salman.

CHARTERED ACCOUNTANTSDATE: SEPTEMBER 19, 2018KARACHI



STATEMENT OF ASSETS AND LIABILITIESAS AT JUNE 30, 2018

June 30, June 30,2018 2017

NoteAssets

Bank balances 7 364,817,379 127,810,152 Investments 8 39,755,106 4,973,065 Receivable against Margin Trading System (MTS) 412,923,785 36,361,252 Prepayments, deposits and other receivables 9 4,627,049 3,926,207 Net (loss) / gain on investments classified as 'at fair value through 10 597,159 811,522 profit or loss' - held-for-trading: 56,555,507 1,159,878 Total assets 879,275,985 175,042,076

Liabilities

Payable to the Management Company 11 745,591 139,711 Remuneration payable to the Trustee 12 101,704 17,582 Accrued and other liabilities 13 1,267,511 893,918 Payable against redemption of units 232,885,399 1,099,868 Dividend payable - 293,479 Total liabilities 235,000,205 2,444,558

Net assets 644,275,780 172,597,518

Unit holders' fund (as per statement attached) 644,275,780 172,597,518

Contingencies and commitments 14

Number of units in issue 6,081,452 1,720,905

Net assets value per unit 105.94 100.29

The annexed notes from 1 to 23 form an integral part of these financial statements.

_____________________ _____________________ ____________________Chief Financial Officer Chief Executive Officer Director

(Management Company)For Faysal Asset Management Limited

------------- (Rupees) -------------

------------- (Rupees) -------------

--------- (Number of units) ---------


INCOME STATEMENTFOR THE YEAR ENDED JUNE 30, 2018

June 30, June 30,2018 2017

Income NoteProfit earned on government securities classified as 'at fair value

through profit or loss' 1,775,155 859,864 Income from Margin Trading System (MTS) 21,267,524 12,420,544 Return on bank balances 4,417,125 2,590,727 Net (loss) / gain on investments classified as 'at fair value through

profit or loss' - held-for-trading:- Net capital (loss) / gain on sale of investments (2,972) 2,404 - Net unrealised loss on revaluation of investments 8.2 (4,818) (260)

(7,790) 2,144

Total income 27,452,014 15,873,279

ExpensesRemuneration of the Management Company 11.1 3,447,452 2,018,881 Sales tax on Management fee 11.2 448,169 262,455 Reimbursement of expenses from the Management Company 9.2 (776,379) (2,226,547) Remuneration of the Trustee 12.1 588,857 346,326 Sales tax on Trustee fee 12.2 76,551 45,022 Bank charges 52,900 41,843 Auditors' remuneration 15 263,282 504,468 SECP annual fee 13.1 257,907 151,864 Fees and subscription 276,999 295,149 Settlement charges and federal excise duty 2,674,316 2,584,282 Printing charges and other expenses 203,599 249,019 Provision for Sindh Workers' Welfare Fund (SWWF) 394,480 129,684 Amortisation of preliminary expenses and floatation costs 10 214,363 214,952 Total expenses 8,122,496 4,617,398

Element of loss and capital losses included in prices of units soldless those in units redeemed - net - (6,837,771)

Net income for the year before taxation 19,329,518 4,418,110

Taxation 16 - -

Net income for the year after taxation 19,329,518 4,418,110

Allocation of net income for the yearNet income for the year 19,329,518 4,418,110 Income already paid on units redeemed (5,859,434) -

13,470,084 4,418,110

Accouting income available for distributionRelating to capital gains - - Excluding capital gains 13,470,084 4,418,110

13,470,084 4,418,110


_____________________ _____________________ ____________________Chief Financial Officer Chief Executive Officer Director

------------- (Rupees) -------------

For Faysal Asset Management Limited(Management Company)


FOR THE YEAR ENDED JUNE 30, 2018June 30, June 30,

2018 2017

Net income for the year after taxation 19,329,518 4,418,110

Other comprehensive income for the year - -

Net (loss) / gain on investments classified as 'at fair value through 19,329,518 4,418,110 profit or loss' - held-for-trading:The annexed notes from 1 to 23 form an integral part of these financial statements.

____________________ ____________________ _____________Chief Financial Officer Chief Executive Officer Director


------------- (Rupees) -------------

STATEMENT OF COMPREHENSIVE INCOME


CASH FLOW STATEMENTFOR THE YEAR ENDED JUNE 30, 2018

June 30, June 30,2018 2017

NoteCASH FLOWS FROM OPERATING ACTIVITIESNet income for the year before taxation 19,329,518 4,418,110

Adjustments for non-cash and other items:Profit earned on government securities classified as 'at fair value

through profit or loss' (1,775,155) (859,864) Income from Margin Trading System (MTS) (21,267,524) (12,420,544) Return on bank balances (4,417,125) (2,590,727) Net (loss) / gain on investments classified as 'at fair value through

profit or loss' - held-for-trading:- Net capital loss / (gain) on sale of investments 2,972 (2,404) - Net unrealised loss on revaluation of investments 4,818 260

Element of loss and capital losses included in prices of unitssold less those in units redeemed - net - 6,837,771

Amortisation of preliminary expenses and floatation costs 214,363 214,952 (7,908,133) (4,402,446)

Decrease / (increase) in assetsPrepayments, deposits and other receivables 1,418,005 (1,530,508)

Increase / (decrease) in liabilitiesPayable to the Management Company 605,880 (1,084,869) Remuneration payable to the Trustee 84,122 (6,729) Accrued and other liabilities 373,593 373,273

1,063,595 (718,325)

Proceeds from redemption of investments 139,961,054 83,981,911 Payments made against purchase of investments (172,975,730) (84,056,765) Receipts / payments made against Margin Trading System (MTS) (376,562,533) 67,679,670 Profits and returns received 23,610,646 15,951,583 Withholding tax paid (44,844) (228,103) Net cash (used in) / generated from operating activities (391,437,940) 76,677,017

CASH FLOWS FROM FINANCING ACTIVITIESAmounts received against issuance of units 1,121,674,778 534,701,640 Payments made against redemption of units (492,936,132) (544,949,797) Dividend paid (293,479) (3,800,034) Net cash generated from / (used in) financing activities 628,445,167 (14,048,191)

Net increase in cash and cash equivalents during the year 237,007,227 62,628,826 Cash and cash equivalents at beginning of the year 127,810,152 65,181,326 Cash and cash equivalents at end of the year 7 364,817,379 127,810,152


_____________________ ______________________ ____________________Chief Financial Officer Chief Executive Officer Director

------------- (Rupees) -------------



FOR THE YEAR ENDED JUNE 30, 2018STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUND

Capital valueUndistributed

income Total Total-------------------------------------------------------- (Rupees) --------------------------------------------------------

Net assets at beginning of the year [Rs. 100.29 per unit] 172,088,503 509,015 172,597,518 175,623,297

Issuance of 11,318,714 units (June 30, 2017: 5,276,183 units) - - Capital value (at net assets value per unit at beginning of the year) 1,135,153,827 - 1,135,153,827 - - Element of income 41,916,580 - 41,916,580 -

Total proceeds on issuance of units 1,177,070,407 - 1,177,070,407 535,861,518

Redemption of 6,958,167 units (June 30, 2017: 5,309,667 units)- Capital value (at net assets value per unit at beginning of the year) (697,834,568) - (697,834,568) - - Amount paid out of element of income

- Relating to 'Net income for the period after taxation' - (5,859,434) (5,859,434) - - Relating to 'Other comprehensive income for the year' - - - -

- Refund / adjustment on units as element of income (21,027,661) - (21,027,661) - Total payments on redemption of units (718,862,229) (5,859,434) (724,721,663) (546,049,665)

Element of loss and capital losses included in prices of units sold less those in units redeemed - net - - - 6,837,771

Total comprehensive income for the year - 19,329,518 19,329,518 4,418,110 Final cash distribution for the year ended June 30, 2016 @ Rs.0.05

per unit declared for distribution on July 04, 2016 - - - (87,720) Interim cash distribution for the period ended June 19, 2017 @ Rs.5.90

per unit declared for distribution on June 20, 2017 - - - (4,005,793) Net income for the year less distribution - 19,329,518 19,329,518 324,597 Net assets at end of the year [Rs. 105.94 per unit] 630,296,681 13,979,099 644,275,780 172,597,518

Distribution for the year

Undistributed income brought forward- Realised - 509,275 509,275 184,264 - Unrealised - (260) (260) 154

- 509,015 509,015 184,418 Accounting income available for distribution

- Relating to capital gains - - - - - Excluding capital gains - 13,470,084 13,470,084 4,418,110

- 13,470,084 13,470,084 4,418,110 Final cash distribution for the year ended June 30, 2016 @ Rs.0.05

per unit declared for distribution on July 04, 2016 - - - (87,720) Interim cash distribution for the period ended June 19, 2017 @ Rs.5.90

per unit declared for distribution on June 20, 2017 - - - (4,005,793)

Undistributed income carried forward - 13,979,099 13,979,099 509,015

- Realised - 13,983,917 13,983,917 509,275 - Unrealised - (4,818) (4,818) (260)

- 13,979,099 13,979,099 509,015

Net assets value per unit at the beginning of the year 100.29 100.11

Net assets value per unit at the end of the year 105.94 100.29


______________________ ______________________ _____________________Chief Financial Officer Chief Executive Officer Director

For Faysal Asset Management Limited (Management Company)

June 30, 2018 June 30, 2017

--------------------- (Rupees) ---------------------


FOR THE YEAR ENDED JUNE 30, 2018NOTES TO THE FINANCIAL STATEMENTS

1. LEGAL STATUS AND NATURE OF BUSINESS

JCR - VIS has awarded an "AM3" asset manager rating to the Management Company as of March 19, 2018.

2. STATEMENT OF COMPLIANCE

3. BASIS OF MEASUREMENT

3.1

3.2

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 New standards, interpretations and amendments

The Fund has adopted the following accountin+B19g standards and the amendments and interpretations of IFRSswhich became effective for the current year:

The adoption of the above amendments, improvements to accounting standards and interpretations did not have anyeffect on the financial statements.

IAS 7 Statement of Cash Flows - Disclosure Initiative - (Amendment)

IAS 12 Income Taxes – Recognition of Deferred Tax Assets for Unrealized losses (Amendments)

The principal accounting policies applied in preparation of these financial statements are set out below. These policies havebeen consistantly applied to all the periods presented, except as described in note 4.1 and 4.2.

Faysal MTS Fund (the Fund) has been established under the Non-Banking Finance Companies (Establishment andRegulation), Rules 2003 (the NBFC Rules) and has been authorised as a unit trust scheme by the Securities and ExchangeCommission of Pakistan (SECP) on December 16, 2015. It has been constituted under a Trust Deed, dated November 17,2015 between Faysal Asset Management Limited (the Management Company), a company incorporated under theCompanies Ordinance, 1984 (now Companies Act, 2017) and Central Depository Company of Pakistan Limited (CDC) as the Trustee, also a company incorporated under the Companies Ordinance, 1984 (now Companies Act, 2017).

The Fund is an open-ended income fund and is listed on the Pakistan Stock Exchange Limited. Units are offered for publicsubscription on a continuous basis and the units are transferable and can be redeemed by surrendering them to the Fund.Title to the assets of the fund are held in the name of CDC as a Trustee of the Fund. The Fund was launched on April 08,2016.

These financial statements have been prepared under the historical cost convention, except for certain investmentsand derivatives which are accounted for as stated in notes 4.3 and 4.4 below.

These financial statements are presented in Pak rupees, which is the Fund's functional and presentation currency.

These financial statements have been prepared in accordance with the accounting and reporting standards as applicable inPakistan. Such standards comprise of:

-International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Standards Board(IASB) as notified under the Companies Act, 2017 (the Act);-Provisions of and directives issued under the Companies Act, 2017 along with part VIIIA of the repealed CompaniesOrdinance, 1984; and-the NBFC Rules, the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the NBFC Regulations) andthe requirements of Trust Deed.

Where provisions of and directives issued under the Companies Act, 2017, part VIIIA of the repealed Companies Ordinance,1984, the NBFC Rules, the NBFC Regulations and requirements of the Trust Deed differ from the IFRS Standards, theprovisions of and directives issued under the Companies Act, 2017, part VIIIA of the repealed Companies Ordinance, 1984,the NBFC Rules, the NBFC Regulations and requirements of the Trust Deed have been followed.

The Fund is categorised as an "Income Scheme" as per the Circular No. 7 of 2009 issued by SECP.

The objective of the Fund is to provide competitive returns primarily through investment in Margin Trading System (MTS)market.

The Pakistan Credit Rating Agency Limited (PACRA) has assigned a "A+(f)" stability rating to Faysal MTS Fund as of June20, 2018.


NOTES TO THE FINANCIAL STATEMENTS4.2 Element of income / (loss) and capital gains / (losses) included in prices of units issued less those in units redeemed

4.3 Investments

At fair value through profit or loss

Previously, an equalisation account called the 'element of income / (loss) and capital gains / (losses) included in pricesof units issued less those in units redeemed' was created, in order to prevent the dilution of per unit income anddistribution of income already paid out on redemption. The net element of income / (loss) and capital gains / (losses)relating to units issued and redeemed during the accounting period which pertained to unrealised appreciation /(diminution) held in the Unit Holder's Fund was recorded in a separate account and any amount remaining in thisreserve account at the end of the accounting period (whether gain or loss) was included in the amount available fordistribution to the unitholders. The remaining portion of the net element of income / (loss) and capital gains / (losses)relating to units issued and redeemed during an accounting period was recognised in the Income Statement.

As required by IAS 8: 'Accounting Policies, Changes in Accounting Estimates and Errors', a change in accountingpolicy requires retrospective application as if that policy had always been applied. However, the ManagementCompany has applied the above changes in accounting policy, including the additional disclosures requirements in the'Income Statement' and 'Statement of Movement in Unit Holders' Fund', prospectively from July 01, 2017 as requiredby SECP vide its S.R.O. No. 756(I) / 2017 dated August 03, 2017. Accordingly, corresponding figures have not beenrestated. The ‘Distribution Statement’ for the comparative period has not been presented as it has been deleted as aresult of the amendments made in the NBFC Regulations through the aforementioned SRO issued by the SECP.

Had the element of income been recognised as per the previous accounting policy, the profit of the Fund would havebeen higher by Rs.15.029 million. The change has resulted in inclusion of certain additional disclosures / newpresentation requirements in the 'Income Statement' and 'Statement of Movement in Unit Holders' Fund' which havebeen incorporated in these statements.

The SECP through its SRO 756(I)/2017 dated August 3, 2017 has made certain amendments in the NBFCRegulations. The notification includes a definition and explanation relating to "element of income" and excludes theelement of income from the expression "accounting income" as described in Regulation 63 (amount distributable tounit holders) of the NBFC Regulations. As per the notification, element of income represents the difference betweennet assets value per unit on the issuance or redemption date, as the case may be, of units and the net assets valueper unit at the beginning of the relevant accounting year. Further, the regulations also specify that element of income isa transaction of capital nature and the receipt and payment of element of income shall be taken to unit holders' fund.However, to maintain the same ex-dividend net asset value of all units outstanding on the accounting date, netelement of income contributed on issue of units lying in unit holders fund will be refunded on units in the sameproportion as dividend bears to accounting income available for distribution. Mutual Funds Association of Pakistan(MUFAP), in consultation with the SECP, has specified the methodology of determination of income paid on unitsredeemed during the year under which such income is paid on gross element received and is calculated from thelatest date at which the Fund achieved net profitability during the year. Furthermore, the revised regulations alsorequire certain additional disclosures with respect to 'Income Statement' and 'Statement of Movement in Unit Holders'Fund', whereas disclosure with respect to 'Distribution Statement' has been deleted in the regulations.

The investments of the Fund, upon initial recognition, are classified as investment at fair value through profit or loss,available-for-sale or held to maturity investments as appropriate.

All investments, are initially measured at fair value plus, in the case of investments not at fair value through profit orloss, transaction costs that are directly attributable to acquisition.

All regular way purchases / sales of investments that require delivery with in the time frame established by theregulation of market convention are recognised on the trade date, i.e. the date on which the Fund commits to purchase/ sell the investment. Regular way purchases / sales of investments require delivery of securities within the periodgenerally established by the regulation or market convention such as "T+2".

This category has two sub-categories, namely; financial instruments held-for-trading, and those designated at fairvalue through profit or loss upon initial recognition.

Investments which are acquired principally for the purposes of generating profit from short-term fluctuation in price orare part of a portfolio in which there is recent actual pattern of short-term profit taking are classified as held-for-trading.

Investments designated at fair value through profit or loss upon initial recognition include those group of financialassets which are managed and their performance evaluated on a fair value basis, in accordance with the documentedrisk management / investment strategy.

These investments are initially recognised at fair value, being the cost of the consideration given.

After initial measurement, investment at fair value through profit or loss are carried at fair value and the gains or losseson revaluation are recognised in the income statement.


NOTES TO THE FINANCIAL STATEMENTSHeld to maturity investments

Available-for-sale investments

Fair value of investments is determined as follows:

Debt securities

Government securities

4.4 Derivatives

4.5 Securities under repurchase / resale agreements

4.6 Provisions

Provisions are recognised when the Fund has a present legal or constructive obligation as a result of past events, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation and areliable estimate of the obligation can be made. Provisions are regularly reviewed and adjusted to reflect the currentbest estimate.

The investment of the Fund in government securities is valued on the basis of rates announced by the FinancialMarket Association of Pakistan.

Transactions of sale under repurchase (repo) of marketable and government securities are entered into at contractedrates for specified periods of time. Securities sold with a simultaneous commitment to repurchase at a specified futuredate (repos) continue to be recognised in the statement of assets and liabilities and are measured in accordance withaccounting policies for investment securities. The counterparty liabilities for amounts received under these transactionsare recorded as financial liabilities. The difference between sale and repurchase price is treated as borrowing chargesand accrued over the life of the repo agreement.

Investment securities with fixed maturities and fixed or determinable payments are classified as 'held-to-maturityinvestments' when management has both the intention and ability to hold till maturity. After initial measurement, suchinvestments are carried at amortised cost less any provision for impairment except for in case of debt securities andgovernment securities, which are carried at fair value in accordance with the requirements of the NBFC Regulations.

Investments which are not classified in any of the preceding categories are classified as available-for-sale investments.After initial measurement, such investments are measured at fair value with unrealised gain or loss recognised directlyin the unit holders' fund until the investment is derecognised or determined to be impaired at which time the cumulativegain or loss previously recognised in unit holders' fund is taken to the income statement.

These are valued at the rates quoted by MUFAP in accordance with the SECP's Circular No. 33 of 2012 dated October24, 2012, read with Regulation 66(b) of the NBFC Regulations.

Derivative instruments held by the Fund generally comprise of futures contracts, options and forwards contracts, etc. inthe capital market. These are initially recognised at cost and are subsequently remeasured at their fair value. The fairvalue of derivative instruments is calculated as being the net difference between the contract price and the closingprice reported on the primary exchange of the instrument. Derivative with positive market values (un-realised gains)are included in other assets and derivatives with negative market values (un-realised losses) are included in otherliabilities in the statement of assets and liabilities. The resultant gains and losses are included in income currently.

Derivative financial instruments entered into by the Fund do not meet the hedging criteria as defined by IAS - 39,Financial Instruments: Recognition and Measurement, consequently hedge accounting is not used by the Fund.

Transactions of purchase under resale (reverse-repo) of marketable and government securities are entered into atcontracted rates for specified periods of time. Securities purchased with a corresponding commitment to resell at aspecified future date (reverse-repos) are not recognised in the statement of assets and liabilities. Amounts paid underthese agreements are included in receivable in respect of reverse repurchase transactions. The difference betweenpurchase and resale price is treated as income from reverse repurchase transactions and accrued over the life of thereverse-repo agreement.


NOTES TO THE FINANCIAL STATEMENTS4.7 Earnings per unit

4.8 Issuance and redemption of units

4.9 Cash and cash equivalents

4.10 Revenue recognition

4.11 Expenses

4.12 Taxation

4.13 Net Assets Value (NAV) per unit

4.14 Distribution to unit holders

4.15 Preliminary expenses and floatation costs

4.16 Financial assets and financial liabilities

Preliminary expenses and floatation costs represent expenditure incurred in connection with incorporation, registration,establishment and authorisation of the Fund till the close of the Initial Public Offering Period. These costs are to beamortised over a period not exceeding sixty months in accordance with the Trust deed.

All financial assets and financial liabilities are recognised at the time when the Fund becomes a party to the contractualprovisions of the instrument. Financial assets are derecognised when the contractual rights to receive cash flowsrelated to the asset expire. Financial liabilities are derecognised when they are extinguished, that is, when theobligation specified in the contract is discharged, cancelled or expires. Any gain or loss on derecognition of thefinancial assets and financial liabilities is taken to income statement currently.

Earnings per unit (EPU) has not been disclosed as in the opinion of the management, the determination of weightedaverage units for calculating EPU is not practicable.

Unrealised gains or losses arising on revaluation of investments classified as 'at fair value through profit or loss' areincluded in the income statement in the year in which they arise.

Gains or losses on sale of investments are accounted for in the period in which it arises.

Units issued are recorded at the offer price prevalent on the day the investment form, complete in all respects, isreceived. The offer price represents the net assets value of units at the end of the day plus the allowable sales load.The sales load is payable to the Management Company as processing fee. Issue of units is recorded on acceptance ofapplication for sale.

All expenses, including management fee and trustee fee, are recognised in the income statement on an accrual basis.

Mark-up on government securities, debt securities, return on certificates of investment, profit on clean placements,return on bank balances and term deposit receipts, income from reverse repurchase agreements and income frommargin trading system (MTS) are recognised on a time proportion basis using effective interest rate method.

The Fund is exempt from taxation under Clause 99 of Part 1 of the Second Schedule to the Income Tax Ordinance,2001, subject to the condition that not less than 90% of its accounting income excluding realised and unrealised capitalgains for the year is distributed amongst the unit holders.

The net assets value per unit disclosed in the statement of assets and liabilities is calculated by dividing the net assetsof the Fund by the number of units in issue at the year end.

Distribution to unit holders made subsequent to the statement of assets and liabilities date are considered as non-adjusting events and are recognised in the financial statements in the year in which such dividends are declared andapproved by the Board of Directors of the Management Company.

Units redeemed are recorded at the redemption price, prevalent on the day the redemption form complete in allrespects is accepted. The redemption price represents the net assets value of units at the end of the day. Redemptionof units is recorded on acceptance of application for redemption.

Cash and cash equivalents comprise cash at banks and short-term deposits with an original maturity of three monthsor less. Cash and cash equivalents are carried in the statement of assets and liabilities at cost.


NOTES TO THE FINANCIAL STATEMENTS

Impairment of financial assets

Impairment is determined as follows:

(a)

(b)

(c)

Offsetting of financial assets and financial liabilities

4.17 Receivable against Margin Trading System (MTS)

5. ACCOUNTING ESTIMATES AND JUDGMENTS

6.

Standards or interpretations

IFRS 2 – Share-based Payments – Classi�cation and Measurement of Share-based Payments Transactions (Amendments) January 01, 2018

IFRS 4 Insurance Contracts: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts – (Amendments) January 01, 2018

IFRS 9 – Financial Instruments July 01, 2018

The following standards, amendments and interpretations with respect to the approved accounting standards as applicable inPakistan would be effective from the dates mentioned below against the respective standard or interpretation:

STANDARDS, INTERPRETATIONS AND AMENDMENTS TO APPROVED ACCOUNTING STANDARDS THAT ARE NOTYET EFFECTIVE

In addition, a provision is made to cover impairment for specific groups of assets where there is a measurabledecrease in estimated future cash flows.

Financial assets and financial liabilities are only offset and the net amount reported in the statement of assets andliabilities when there is a legally enforceable right to set off the recognised amount and the Fund intends to either settleon a net basis, or to realise the asset and settle the liability simultaneously.

Transactions for purchase of marketable securities under Margin Trading System (MTS) are entered into at contractedrates for specified period of time. Securities purchased under the MTS are not recognised in the statement of assetsand liabilities. 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 adjustedagainst the receivable as reduction in the amount of receivable. The maximum maturity of a MTS contract is 60working days and 25% of the exposure is released automatically at the expiry of every 15th working day.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affectthe application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associatedassumptions are based on historical experience and various other factors that are believed to be reasonable under thecircumstances, the result of which form the basis of making judgements about carrying values of assets and liabilities. Theestimates and underlying assumptions are reviewed on an ongoing basis.

Judgements made by management in the application of accounting policies that have significant effect on the financialstatements and estimates with a significant risk of material adjustment are explained in notes 4.3, 4.4, 4.6, 4.12 and 4.16 tothe financial statements.

Financial assets carried in the statement of assets and liabilities include bank balances, investments, receivableagainst Margin Trading System (MTS), receivable against issuance of units and deposits and other receivables.

For available-for-sale equity investments, reversal of impairment losses are recorded as increases incumulative changes in fair value through unit holders' fund.

for assets carried at fair value, impairment is the difference between cost and fair value.

for assets carried at cost, impairment is the difference between present value of future cash flows discountedat the current market rate of return for a similar financial asset and cost.

An assessment is made at each statement of assets and liabilities date to determine whether there is objectiveevidence that a specific financial asset may be impaired. If such evidence exists, any impairment loss, is recognised inthe income statement.

for assets carried at amortised cost, impairment is the difference between present value of estimated cashflows discounted at the original effective interest rate and amortised cost.

Financial liabilities carried in the statement of assets and liabilities include payable to the Management Company,remuneration payable to the Trustee, payable against redemption of units and accrued and other liabilities.

Effective date(accounting periods

beginning on or after)



IFRS 9 – Prepayment Features with Negative Compensation - July 01, 2018(Amendments)

IFRS 10 Consolidated Financial Statements and IAS 28 Investment in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendment) Not yet finalized

IFRS 15 – Revenue from Contracts with Customers July 01, 2018

IFRS 16 – Leases January 01, 2019

IAS 19 - Plan Amendment, Curtailment or Settlement (Amendments) January 01, 2019

IAS 28 - Long-term Interests in Associates and Joint Ventures – January 01, 2019(Amendments)

IAS 40 Investment Property: Transfers of Investment Property January 01, 2018(Amendments)

IFRIC 22 Foreign Currency Transactions and Advance Consideration January 01, 2018

IFRIC 23 Uncertainty over Income Tax Treatments January 01, 2019

Standards

IFRS 14 – Regulatory Deferral Accounts

IFRS 17 – Insurance Contracts

June 30, June 30,2018 2017

Note7. BANK BALANCES

Cash at bank - PLS savings accounts 7.1 364,817,379 127,810,152

7.1

8. INVESTMENTS

'At fair value through profit or loss' - held-for-trading

Government securities 8.1 39,755,106 4,973,065

Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the purpose ofapplicability in Pakistan.

In addition to the above standards and amendments, improvements to various accounting standards have also been issuedby the IASB in December 2016 and December 2017. Such improvements are generally effective for accounting periodsbeginning on or after January 01, 2018 and January 01, 2019, respectively. The Fund expects that such improvements to thestandards will not have any impact on the Fund's financial statements in the period of initial application.

The IASB has also issued the revised Conceptual Framework for Financial Reporting (the Conceptual Framework) in March2018 which is effective for annual periods beginning on or after January 01, 2020 for preparers of financial statements whodevelop accounting policies based on the Conceptual Framework. The revised Conceptual Framework is not a standard, andnone of the concepts override those in any standard or any requirements in a standard. The purpose of the ConceptualFramework is to assist IASB in developing standards, to help preparers develop consistent accounting policies if there is noapplicable standard in place and to assist all parties to understand and interpret the standards. The Conceptual Framework iscurrently not applicable on these financial statements.

The above standards and amendments are not expected to have any material impact on the Fund's financial statements inthe period of initial application. However, the Fund is currently evaluating the requirements of IFRS-9 and potential impact onthe financial statements of the Fund.

Effective date(accounting periods

beginning on or after)

These carry mark-up ranging between 4.50% and 7.35% (June 30, 2017: 3.75% and 6.25%) per annum and include abalance of Rs. 4,155,401 (June 30, 2017: 107,364) held with Faysal Bank Limited (a related party).

------------------ (Rupees) ------------------

IASB effective date

January 01, 2021

(annual periodsbeginning on or after)

January 01, 2016


NOTES TO THE FINANCIAL STATEMENTS8.

1G

over

nmen

t sec

uriti

es -

'at f

air v

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year

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/ m

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e ye

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s at

Jun

e 30

, 201

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t v

alue

Unr

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ed

loss

on

reva

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ion

Mar

ket t

reas

ury

bills

Mar

ket t

reas

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bills

- 3

mon

ths

(not

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6.21

% to

6.7

4%5,

000,

000

17

5,00

0,00

0

140,

000,

000

40

,000

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39

,759

,924

39

,755

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(4,8

18)

100.

00%

June

30,

201

74,

973,

325

4,97

3,06

5

(2

60)

8.1.

1

June

30,

June

30,

2018

2017

8.2

Net

unr

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ss o

n re

valu

atio

n of

inve

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ents

cla

ssifi

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roug

h pr

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ss' -

hel

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ket v

alue

of i

nves

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4,

973,

065

C

ost o

f inv

estm

ents

(39,

759,

924)

(4,9

73,3

25)

(4,8

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(2

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Net

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oss)

/ ga

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n in

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t beg

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f the

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154

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on

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the

year

260

(1

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-

-

(4

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)

(260

)

9.PR

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250,

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250,

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epos

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100,

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100,

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350,

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350,

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Inco

me

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n M

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1,84

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2

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218

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9.1

872,

702

310,

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350,

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305,

353

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f exp

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from

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277

6,37

9

2,

226,

547

4,

627,

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3,

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9.1

9.2

As

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23of

2016

date

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ly20

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ting

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for

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WF

and

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fee.

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incl

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rn re

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able

am

ount

ing

to R

s.15

,120

(Jun

e 30

, 201

7: R

s.61

) on

bala

nce

held

with

Fay

sal B

ank

Lim

ited

(a re

late

d pa

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-


NOTES TO THE FINANCIAL STATEMENTSJune 30, June 30,

2018 201710. NET (LOSS) / GAIN ON INVESTMENTS CLASSIFIED AS 'AT FAIR VALUE THROUGH Note

Balance at beginning of the year 811,522 1,026,474 Amortised during the year 10.1 (214,363) (214,952) Balance at end of the year 597,159 811,522

10.1

11. PAYABLE TO THE MANAGEMENT COMPANY

Management fee payable 11.1 521,382 99,888 Sales tax payable on Management fee 11.2 67,780 12,985 Sales load payable 156,429 26,838

745,591 139,711

11.1

11.2

12. REMUNERATION PAYABLE TO THE TRUSTEE

Remuneration payable to the Trustee 12.1 90,005 15,560 Sales tax payable on Trustee fee 12.2 11,699 2,022

101,704 17,582

12.1

Net assets (Rs.) Tariff

Up to Rs.1 billion 0.17% per annum of net assets. Rs.1 billion to Rs.5 billion

Over Rs.5 billion

12.2

13. ACCRUED AND OTHER LIABILITIES

SECP annual fee payable 13.1 257,907 151,839 Accrued liabilities 419,158 546,157 Provision for Sindh Workers' Welfare Fund (SWWF) 13.2 524,164 129,684 Provision for indirect taxes and duties 13.3 66,282 66,238

1,267,511 893,918

13.1

13.2

The Government of Sindh has levied Sindh Sales Tax at the rate of 13% (June 30, 2017: 13%) on the remuneration of theManagement Company through the Sindh Sales Tax on Services Act, 2011.

Rs.1.7 million plus 0.085% per annum of net assets exceedingRs.1 billion.

------------------ (Rupees) ------------------

The Trustee is entitled to a monthly remuneration for services rendered to the Fund under the provisions of the Trust Deed as per the tariff specified therein, based on the daily net assets value of the Fund.

The Government of Sindh has levied Sindh Sales Tax at the rate of 13% (June 30, 2017: 13%) on the remuneration of theTrustee through the Sindh Sales Tax on Services Act, 2011.

Preliminary expenses and floatation costs represent expenditure incurred prior to the commencement of operations of theFund as incurred by the Management Company and are being amortised over a period of five years commencing from April08, 2016.

The Management Company is entitled to a remuneration for services rendered to the Fund under the provisions of the NBFCRegulations during the first five years of a Fund’s existence of an amount not exceeding three percent of the average annualnet assets of the Fund and thereafter of an amount equal to two percent of such assets. The Management Company hascharged its remuneration at the rate of 1% (June 30, 2017: 1%) per annum of the daily net assets value of the Fund.

This represents annual fee payable to the SECP in accordance with the NBFC Regulations, whereby the Fund is required topay SECP annually an amount equal to 0.075% (June 30, 2017: 0.075%) per annum of the daily net assets value of theFund.

As a consequence of the 18th amendment to the Constitution of Pakistan, in May 2015 the Sindh Workers’ Welfare FundAct, 2014 (SWWF Act) had been passed by the Government of Sindh as a result of which every industrial establishmentlocated in the Province of Sindh, the total income of which in any accounting year is not less than Rs.0.5 million, is requiredto pay Sindh Workers’ Welfare Fund (SWWF) in respect of that year a sum equal to two percent of such income. The matterwas taken up by the MUFAP with the Sindh Revenue Board (SRB) collectively on behalf of various asset managementcompanies and their CISs whereby it was contested that mutual funds should be excluded from the ambit of the SWWF Actas these were not industrial establishments but were pass through investment vehicles and did not employ workers. The SRB held that mutual funds were included in the definition of financial institutions as per the Financial Institution (Recovery ofFinances) Ordinance, 2001 and were, hence, required to register and pay SWWF under the SWWF Act. Thereafter, MUFAPhas taken up the matter with the Sindh Finance Ministry to have CISs / mutual funds excluded from the applicability ofSWWF. However, as a matter of abundant caution, MUFAP has recommended to all its members to record a provision ofSindh WWF from the date of enactment of Sindh WWF Act, 2014 (i.e. starting from May 21, 2015).

Rs.5.1 million plus 0.07% per annum of net assets exceeding Rs.5billion.

The provision for SWWF is now being made on a daily basis. Had the provision for SWWF not been recorded in the financialstatements of the Fund, the net assets value of the Fund as at June 30, 2018 would have been higher by Rs.0.09 per unit(June 30, 2017: Rs.0.08 per unit).


NOTES TO THE FINANCIAL STATEMENTS13.3

June 30, June 30,2018 2017

14. CONTINGENCIES AND COMMITMENTS

Margin Trading System (MTS) transactions entered into by theFund which have not been settled as at year end:

Purchase transactions 39,750,007 29,786,941 Sale transactions 68,053,566 1,645,199

15. AUDITORS' REMUNERATION

Audit fee 100,000 275,000 Review and other certifications 100,000 150,500 Other 44,150 50,413

244,150 475,913 Sales tax 19,532 28,555

263,682 504,468

16. TAXATION

17. TRANSACTIONS WITH CONNECTED PERSONS / RELATED PARTIES

17.1

17.2

17.3 The details of significant transactions carried out by the Fund with connected persons / related parties and balances withthem at year end are as follows:

Connected persons / related parties include Faysal Asset Management Limited being the Management Company, CDC beingthe Trustee, other collective investment schemes managed by the Management Company, Faysal Asset ManagementLimited - Staff Provident Fund, Faysal Asset Management Limited - Staff Gratuity Fund, Faysal Bank Limited, Faysal BankLimited - Staff Provident Fund, Faysal Bank Limited - Staff Gratuity Fund, and other entities under common management and/ or directorship and the directors and officers of the Management Company and connected persons. Connected personsalso includes any person beneficially owing directly or indirectly 10% or more of the units in the issue / net assets of theFund.

The transactions with connected persons are in the normal course of business, at contracted rates and at terms determinedin accordance with market rates.

During the previous year, the SHC passed an order whereby all notices, proceedings taken or pending, orders made, dutyrecovered or actions taken under the Federal Excise Act, 2005 in respect of the rendering or providing of services (to theextent as challenged in any relevant petition) were set aside. In response to this, the Deputy Commissioner Inland Revenuehas filed a Civil Petition for leave to appeal in the Supreme Court of Pakistan which is pending adjudication.

The income of the fund is exempt from income tax under Clause 99 of Part 1 of the Second Schedule to 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 realized or unrealized, is distributed amongst the unit holders. As given in note 21, the Management Company, subsequentto year end, has announced 95% distribution of accounting income for the year to avail the tax exemption. Accordingly, no provisionfor current and deferred tax has been made in these financial statements. The Fund is also exempt from the provisions of section113 (minimum tax) under clause I I A of Part IV to the Second Schedule of the Income Tax Ordinance, 2001. Accordingly, Supertaxintroduced in Finance Act, 2015 is also not applicable on funds (Section 48 of Income Tax Ordinance, 2001).

The Finance Act, 2013 enlarged the scope of Federal Excise Duty (FED) on financial services to include Asset ManagementCompanies (AMCs) with effect from June 13, 2013. As the asset management services rendered by the ManagementCompany of the Fund were already subject to provincial sales tax on services levied by the Sindh Revenue Board, which isbeing charged to the Fund, the Management Company was of the view that further levy of FED was not justified.

In view of the above, the Fund has discontinued making further provision in respect of FED on remuneration of theManagement Company with effect from July 1, 2016. However, as a matter of abundant caution, the Fund has charged FEDand sales tax on service thereon in its financial statements with effect from the date of commencement of its operations tillJune 30, 2016. As at June 30, 2018, the Fund has held a provision for FED aggregating to Rs.0.06 million (June 30, 2017:Rs.0.06 million). Had the said provision for FED not been recorded in the financial statements of the Fund, the net assetsvalue of the Fund as at June 30, 2018 would have been higher by Rs.0.01 (June 30, 2017: Rs.0.04) per unit.

------------------ (Rupees) ------------------

With effect from July 01, 2016, FED on services provided or rendered by Non-Banking Financial Institutions dealing inservices which are subject to provincial sales tax has been withdrawn through the Finance Act, 2016.

On September 04, 2013, a Constitutional Petition was filed in the Honourable Sindh High Court (SHC) jointly by various Asset Management Companies, together with their representatives of Collective Investment Schemes through their trustees,challenging the levy of FED.


NOTES TO THE FINANCIAL STATEMENTSJune 30, June 30,

2018 2017

Transactions during the year

Faysal Asset Management Limited (Management Company)Remuneration of the Management Company 3,447,452 2,018,881 Sales tax on Management fee 448,169 262,455 Reimbursement of expenses from the Management Company 776,379 2,226,547

Faysal Bank Limited (Group / Associated Company)Return on PLS savings account 107,210 1,802 Bank charges 896 4,376

Directors and Key Management Personnel ofthe Management CompanyIssue of Nil units (2017: 52,984 units) - 5,518,231 Redemption of 36,260 units (2017: Nil units) 3,732,944 -

Central Depository Company of Pakistan Limited - (Trustee of the Fund)Remuneration of the Trustee 588,857 346,326 Sales tax on Trustee fee 76,551 45,022 Settlement charges 257,090 327,156

Unit holder holding 10% or more units

Zeba Rashid FaruquiIssue of 693,285 units (2017: Nil units) 73,599,423 -

Outstanding balances

Faysal Asset Management Limited (Management Company)Reimbursement of expenses receivable

from the Management Company 776,379 2,226,547 Management fee payable 521,382 99,888 Sales tax payable on Management fee 67,780 12,985 Sales load payable 156,429 26,838

Faysal Bank Limited (Group / Associated Company)Balance in PLS savings accounts 4,155,401 107,364 Return receivable on PLS savings account 15,120 61

Faysal Islamic Asset Allocation Fund -(Fund under common management)Receivable from Faysal Islamic Asset Allocation Fund - 821,878

Directors and Key Management Personnel ofthe Management CompanyUnits in issue of 16,724 units (2017: 52,984 units) 1,771,741 5,313,765

Central Depository Company of Pakistan Limited - (Trustee of the Fund)Security deposit 100,000 100,000 Remuneration payable to the Trustee 90,005 15,560 Sales tax payable on Trustee fee 11,699 2,022

Unit holder holding 10% or more units

Zeba Rashid FaruquiUnits in issue of 693,285 units (2017: Nil units) 73,446,613 -

------------------ (Rupees) ------------------


NOTES TO THE FINANCIAL STATEMENTS18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

18.1 Market risk

(i) Interest rate risk

(ii) Foreign currency risk

(iii) Equity price risk

18.2 Liquidity risk

The Fund’s objective in managing risk is the creation and protection of unit holders’ value. Risk is inherent in theFund’s activities, but it is managed through monitoring and controlling activities which are primarily set up to beperformed based on limits established by the Management Company, Fund's constitutive documents and theregulations and directives of the SECP. These limits reflect the business strategy and market environment of theFund as well as the level of the risk that the Fund is willing to accept. The Board of Directors of the ManagementCompany supervises the overall risk management approach within the Fund. The Fund is exposed to market risk,liquidity risk and credit risk arising from the financial instruments it holds.

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates and equity prices.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates. As of June 30, 2018, the Fund's exposure to the risk ofchanges in market interest rates relates primarily to bank balances, government securities andreceivable against Margin Trading System (MTS). The bank balances are subject to rates as declaredby the respective banks / institutions on a periodic basis. The government securities are subject tofixed interest rates and valued by reference to the quotations obtained from Financial MarketAssociation of Pakistan. Receivable against Margin Trading System (MTS) are also subject to fixedinterest rates which have been negotiated between the participants. As at June 30, 2018,approximately 93.12% (June 30, 2017: 97.48%) of the Fund's financial assets are subject to interestrates.

Management of the Fund estimates that an increase of 100 basis points in the floating interest rate,with all other factors remaining constant, would increase the Fund's income and increase the netassets of the Fund by Rs.3.65 million (June 30, 2017: Rs.1.28 million) and a decrease of 100 basispoints would decrease the Fund's income and decrease the net assets of the Fund by the sameamount. However, in practice, the actual results may differ from the sensitivity analysis.

Management of the Fund estimates that an increase of 100 basis points in the fixed interest rate, withall other factors remaining constant, would increase the Fund's income and increase the net assets ofthe Fund by Rs.4.53 million (June 30, 2017: Rs.0.41 million) and a decrease of 100 basis points woulddecrease the Fund's income and decrease the net assets of the Fund by the same amount. However,in practice, the actual results may differ from the sensitivity analysis.

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associatedwith financial liabilities. Liquidity risk arises because of the possibility that the Fund could be required to payits liabilities earlier than expected. The Fund is exposed to cash redemptions of its redeemable units on aregular basis. Units are redeemable at the unit holders' option based on the Fund’s net assets value perunit at the time of redemption calculated in accordance with the Fund’s constitutive documents.

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in foreign exchange rates. The Fund does not have any financialinstruments in foreign currencies and hence is not exposed to such risk.

Equity price risk is the risk of volatility in share prices resulting from their dependence on marketsentiments, speculative activities, supply and demand for shares and liquidity in the market. The equityprice risk exposure arises from the Fund's investment in equity securities. The Fund does not have anyequity instrument; therefore, it is not exposed to such risk.



Total

Financial liabilitiesPayable to the Management Company 677,811 - - 677,811 Remuneration payable to the Trustee 90,005 - - 90,005 Accrued and other liabilities 419,158 - - 419,158 Payable against redemption of units 232,885,399 - - 232,885,399

234,072,373 - - 234,072,373

Total

Financial liabilitiesPayable to the Management Company 126,726 - - 126,726 Remuneration payable to the Trustee 15,560 - - 15,560 Accrued and other liabilities 546,157 - - 546,157 Payable against redemption of units 1,099,868 - - 1,099,868 Dividend payable 293,479 - - 293,479

2,081,790 - - 2,081,790

18.3 Credit risk

June 30, June 30,2018 2017

Bank balances 364,817,379 127,810,152 Security deposits 350,000 350,000 Return receivable on bank balances 872,702 310,763 Income receivable on Margin Trading System (MTS) 1,845,282 333,218 Receivable against Margin Trading System (MTS) 412,923,785 36,361,252 Reimbursement of expenses receivable from the Management Company 776,379 2,226,547 profit or loss' - held-for-trading: 56,555,507 1,159,878

838,141,034 168,551,810

In order to manage the Fund's overall liquidity, the Fund also has the ability to withhold daily redemptionrequests in excess of ten percent of the units in issue and such requests would be treated as redemptionrequests qualifying for being processed on the next business day. Such procedure would continue until theoutstanding redemption requests come down to a level below ten percent of the units in issue. The Funddid not withhold any redemptions during the year.

------------------------------------- (Rupees) -------------------------------------

Upto three months

More than three months and upto

one yearMore than one

year

------------------ (Rupees) ------------------

------------------------------------- (Rupees) -------------------------------------

The table below summarises the maturity profile of the Fund's financial liabilities based on contractualundiscounted payments.

June 30, 2018Upto three

months

More than three months and upto

one yearMore than one

year

June 30, 2017

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Fundby failing to discharge its obligation. The Fund’s policy is to enter into financial contracts with reputablecounter parties in accordance with the internal guidelines, offering document and regulatory requirements.The table below analyses the Fund's maximum exposure to credit risk. The maximum exposure is showngross, before the effect of mitigation through the use of collateral agreements at reporting date:

All deposits with banks, NCCPL and CDC are highly rated and risk of default is considered minimal.Furthermore, investments in government securities i.e. market treasury bills are not exposed to credit risk.



June 30, June 30,2018 2017

Rating categoryAAA, AA+, AA, AA- 43.63 76.01 AM3 0.09 1.32 Unrated 56.28 22.67

100.00 100.00

The table below analyses the Fund's concentration of credit risk by industrial distribution:

Commercial banks 43.63 76.01 Other financial institution 0.09 1.32 Others 56.28 22.67

100.00 100.00

18.4 Unit holders' fund

19. FAIR VALUE OF FINANCIAL INSTRUMENTS

Level 1:

Level 2:

Level 3:

The Fund has no restrictions or specific capital requirements on the subscription and redemption of units.

In accordance with the risk management policies, the Fund endeavours to invest the subscriptionsreceived in appropriate investments while maintaining sufficient liquidity to meet redemption requests, suchliquidity being augmented by short-term borrowings or disposal of investments where necessary.

% of assets exposed to credit risk

-------------------- % --------------------

Concentration of credit risk exists when changes in economic or industry factors affect the group ofcounterparties whose aggregate credit exposure is significant in relation to the Fund’s total credit exposure.The Fund’s portfolio of financial assets is broadly diversified and transactions are entered into with diversecredit worthy counterparties thereby mitigating any significant concentration of credit risk. The table belowanalyses the credit quality of the Fund's exposure:

those with inputs for the asset or liability that are not based on observable market data (unobservableinputs).

quoted prices in active markets for identical assets or liabilities;

those involving inputs other than quoted prices included in Level 1 that are observable for the asset orliability, either directly (as prices) or indirectly (derived from prices); and

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements and disclosuresabout fair value measurement where such measurements are required as permitted by other IFRSs. It defines fairvalue as the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date (i.e. an exit price).

Financial assets which are tradable in an open market are revalued at the market prices prevailing on thestatement of assets and liabilities date. The estimated fair value of all other financial assets and financialliabilities is considered not significantly different from book value.

Under the NBFC Regulations, the minimum size of an open end scheme shall be one hundred millionrupees at all the times during the life of the scheme.

The following table shows financial instruments recognized at fair value, analysed between those whose fairvalue is based on:

The capital of the Fund is represented by the net assets attributable to holders of redeemable units. Thecapital structure depends on the issuance and redemption of units. The Fund’s objective when managingunit holders’ fund is to safeguard the Fund’s ability to continue as a going concern in order to seekmaximum preservation of unit holders’ fund and an optimum rate of return by investing in avenues havinggood credit rating and liquidity and to maintain a strong capital base to support the development of theinvestment activities of the Fund.



Leve

l 1Le

vel 2

Leve

l 3To

tal

Fina

ncia

l ass

ets

mea

sure

d at

fair

valu

e

Inve

stm

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cla

ssifi

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s 'a

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lue

thro

ugh

prof

it or

loss

' -

held

-for-

trad

ing

Gov

ernm

ent s

ecur

ities

- Mar

ket t

reas

ury

bills

39,7

55,1

06

-

-

39,7

55,1

06

-

39,7

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06

-

39

,755

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Fina

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Ban

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364,

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379

-

364,

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R

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Trad

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Sys

tem

(MTS

)-

412,

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412,

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pr

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Dep

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3,84

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3

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3,84

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3

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83

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Pay

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s-

-

41

9,15

8

419,

158

Pay

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aga

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-

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232,

885,

399

23

2,88

5,39

9

-

-

234,

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373

23

4,07

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3

The

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ts m

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at th

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the

repo

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to w

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the

fair

valu

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rem

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s ca

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------

------

------

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--- (R

upee

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------

------

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------

------

----

------

------

------

------

-- (R

upee

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------

------

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------

---

June

30,

201

8C

arry

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amou

ntFa

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'At f

air v

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th

roug

h pr

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' - h

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for-

trad

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Loan

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rece

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Oth

er

finan

cial

lia

bilit

ies

Tota

l



Leve

l 1Le

vel 2

Leve

l 3To

tal

Fina

ncia

l ass

ets

mea

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d at

fair

valu

e

Inve

stm

ents

cla

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s 'a

t fai

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thro

ugh

prof

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loss

' -

held

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trad

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Gov

ernm

ent s

ecur

ities

- Mar

ket t

reas

ury

bills

4,97

3,06

5

-

-

4,

973,

065

-

4,97

3,06

5

-

4,97

3,06

5

Fina

ncia

l ass

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not m

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at fa

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Ban

k ba

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es-

127,

810,

152

-

127,

810,

152

R

ecei

vabl

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ains

t Mar

gin

Trad

ing

Sys

tem

(MTS

)-

36,3

61,2

52

-

36

,361

,252

Dep

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and

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ceiv

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s-

3,22

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8

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0,52

8

Rec

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NOTES TO THE FINANCIAL STATEMENTS21 FAYSAL MTS FUND

20. SUPPLEMENTARY NON FINANCIAL INFORMATION

21. SUBSEQUENT EVENT

22. GENERAL

Figures have been rounded off to the nearest rupee.

23. DATE OF AUTHORISATION FOR ISSUE

The financial statements were authorised for issue on ___________________ by the Board of Directors of the Management Company.

_____________________ _____________ ____________________Chief Financial Officer Chief Executive Officer Director


The information regarding pattern of unit holding, top ten brokers, members of the Investment Committee, performance table, fund manager, meetings of the Board of Directors of theManagement Company and rating of the Fund and the Management Company has been disclosed in Annexure I to the financial statements.

The Board of Directors in their meeting held on July 06, 2018 has announced a distribution of Rs.5.37 per unit for the year ended June 30, 2018 out of which Rs.2.10 will bedistributed from income for the year in the form of cash dividend and Rs.3.27 will be distributed from Unit Holders' Account as refund of capital. The effect of such dividend shall beaccounted for in the financial statements for the year ending June 30, 2019.

September 19, 2018September 19, 2018


SUPPLEMENTARY NON FINANCIAL INFORMATIONDISCLOSURE REQUIREMENTS UNDER CLAUSE 6 - NOTES TO THE ACCOUNTS

SUB CLAUSE (D), (F), (G), (H), (I) AND (J) OF THE 5TH SCHEDULE TO THE NON BANKING FINANCE COMPANIES AND NOTIFIED ENTITIES REGULATIONS, 2008

Annexure I

(i) PATTERN OF UNIT HOLDING

No. of investors Units held %

Associated company - - - Insurance company - - - Retirement funds 14 1,224,962 20.14 Individuals 169 3,641,893 59.89 Banks and DFIs - - -NBFCs - - -Other 15 1,214,597 19.97

198 6,081,452 100.00

(ii) TOP TEN BROKERS BY PERCENTAGE OF COMMISSION PAIDJune 30, 2018

%Magenta Capital 67.44%Next Capital Limited 32.56%

June 30, 2017%

(iii) THE MEMBERS OF THE INVESTMENT COMMITTEE

Following are the members of the Investment Committee of the Fund:

Name Qualification ExperienceMr.Razi-ur-Rahman Khan B.A./ FCA (Institute of Chartered Accountant, England) Over 31 yearsMr.Ayub Khuhro B.Sc. Economics, CFA I Over 9 yearsMr.Mohammad Qasim B. S. (Actuarial Science & Risk Management) & MBA (Fin.) Over 8 yearsMr. Syed Shahid Iqbal B. Com. Over 26 years

Category

Name

Name




(iv) PARTICULARS OF FUND MANAGERS

Name Qualification Other Collective Investment Schemes ManagedMr. Syed Shahid Iqbal B. Com. Faysal Money Market Fund

Faysal Savings Growth Fund Faysal Financial Sector Opportunity Fund

Faysal Islamic Savings Growth Fund Faysal Income & Growth Fund

June 30, 2018 June 30, 2017 June 30, 2016 Rupees Rupees Rupees

(v) PERFORMANCE TABLE

Net assets 644,275,780 172,597,518 175,623,298 Net assets value per unit 105.94 100.29 100.11 Offer price per unit 108.06 101.30 101.11 Repurchase price per unit 105.94 100.29 100.11 Highest offer price per unit 108.06 105.99 109.06 Highest repurchase price per unit 105.94 105.99 109.06 Lowest offer price per unit 101.32 100.09 100.88 Lowest repurchase price per unit 100.31 100.09 100.88

Total return: 5.63% 6.14% 5.96%- capital growth -17.96% 0.36% 0.18%- income distribution 23.59% 5.78% 5.78%

Average annual return:(Launch date: Decemeber 13, 2010)

- one year 5.63% 6.14% 5.96%- two years 5.89% 6.05% 5.96%- three years 5.91% 6.05% 5.96%

Distribution per unit:- Interim distribution (% per unit) - 1.26% 1.26%- Final distribution (% per unit) 5.35% 0.05% 0.05%

5.35% 1.31% 1.31%

(vi) Expense ratio from the July 01, 2017 to June 30, 2018Faysal MTS Fund (FMTSF) has total expense ratio (TER) of 2.35%, the TER inlcudes 0.33% representinggovernment levy, SECP fee and Sindh Workers Welfare Fund.

The Fund's past performance is not necessarily indicative of future performance. Therefore, the unit pricesand investment returns may go down, as well as up.




(vii) MEETINGS OF THE BOARD OF DIRECTORS

Apr 27, 2018 Feb 23, 2018 Oct 19, 2017 Sep 22, 2017Mr. Salman Ahmed Usmani 4 1 1 1 1Mr. Syed Ibad ur Rehman Chishti 3 0 1 1 1Mr. Osman Asghar Khan 4 1 1 1 1Mr. Mohammad Zahid Ahmed 4 1 1 1 1Mr. Farooq Hassan 4 1 1 1 1Mr. Razi-ur-Rahman Khan 4 1 1 1 1

(viii) MEETINGS OF THE AUDIT COMMITTEE

Apr 26, 2018 Feb 23, 2018 Oct 19, 2017 Sep 21, 2017Mr. Osman Asghar Khan 4 1 1 1 1Mr. Syed Ibad ur Rehman Chishti 3 0 1 1 1Mr. Farooq Hassan 4 1 1 1 1

(ix) MEETINGS OF THE BOARD HR COMMITTEE

Mr. Osman Asghar Khan 1Mr. Syed Ibad ur Rehman Chishti 1Mr. Razi-ur-Rahman Khan 1

(x) RATING OF THE FUND AND THE MANAGEMENT COMPANY

Jun 29, 20181

Following is the analysis of the attendance in the meetings of the Board of Directors of the Management Company during the year:

Name of DirectorMeetings attended

Meeting held on

Following is the analysis of the attendance in the meetings of the Audit Committee of the Management Company during the year:

Name of MemberMeetings attended

Meeting held on

Following is the analysis of the attendance in the meetings of the Board HR Committee of the Management Company during the year:

11

Name of MemberMeetings attended

The Pakistan Credit Rating Agency Limited (PACRA) has assigned a "A+(f)" stability rating to Faysal MTS Fund as of June 20, 2018and JCR - VIS has awarded an "AM3" asset manager rating to the Management Company as of March 19, 2018.

Meeting held on



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