js capital protected fund iv - js investments · 2011-03-01 · js capital protected fund iv 02 in...

JS Capital Protected Fund IVHalf Yearly Report for the period

ended December 31, 2010

Managing Mutual Funds Better!

CONTENTS

01

JS Capital Protected Fund IV

Vision and Mission Statement...........................................................................................02

Organization..................................................................................................................03

Directors' Report to the Unit Holders..................................................................................04

Report of the Trustee to the Unit Holders............................................................................05

Auditors’ Review report to the Unit Holders..........................................................................06

Condensed Interim Statement of Assets and Liabilities ........................................................07

Condensed Interim Income Statement.............................................................................08

Condensed Interim Statement of Comprehensive Income...................................................09

Condensed Interim Cash Flow Statement........................................................................10

Condensed Interim Statement of Movement in Unit Holders' Fund.......................................11

Condensed Interim Distribution Statement..........................................................................12

Notes to the Condensed Interim Financial Statements.........................................................13


02

In July, 2010, the Board of Directors of JS Investments Limited adoptedthe sustainable growth initiative "JSIL 2010 Onwards ~"proposed bythe newly appointed CEO. The revised Vision, Mission, and Statementof Broad Policy Objectives of JS Investments form the bedrock of "JSIL2010 Onwards ~" and have been framed after a thorough S.W.O.T.Analysis of the Company and assessment of the Macro-economic andFinancial Market Trends.

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

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

BROAD POLICY OBJECTIVES

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


ORGANIZATION

03

Management Company JS Investments Limited7th Floor, The Forum, G-20Khayaban-e-Jami, Block-9, CliftonKarachi-75600Tel: (92-21) 111-222-626 Fax: (92-21) 35361724

E-mail: [email protected]: www.jsil.com

Board of Directors Munawar Alam Siddiqui ChairmanRashid Mansur Chief Executive OfficerSuleman Lalani Executive DirectorNazar Mohammad ShaikhLt.General (R) Masood ParwaizSadeq SayeedMazharul Haq Siddiqui (Subject to approval of SECP)

Audit Committee Nazar Mohammad Shaikh Chairman Munawar Alam Siddiqui Member

Lt.General (R) Masood Parwaiz Member

Chief Financial Officer& Company Secretary Suleman Lalani

Trustee MCB Financial Services Ltd.3rd Floor, Adamjee HouseI.I.Chundrigar Road,Karachi - 74000

Auditors Ernst & Young Ford Rhodes Sidat HyderChartered Accountants

Legal Adviser Bawaney & Partners

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

04

DIRECTORS' REPORT TO THE UNITS HOLDERS

The Board of Directors of JS Investments Limited has pleasure in presenting to you the un-audited financial statementsof JS Capital Protected Fund IV for the period ended December 31, 2010.

Market Review

The equity market depicted robust performance during the half-year ended December 31, 2010 represented by asignificant rise of 21% in the KSE-30 index. Heavy discount to regional markets coupled with relative exchange ratestability have been key reasons behind a USD 249mn foreign inflow which led to this significant improvement. Investorconfidence was largely restored towards the latter half of the six month period in the post-CGT (Capital Gains Tax) era,when volumes recovered sharply to average 90.6mn shares as opposed to 46.0mn shares in the earlier half, representingan increase of 98%.

Earlier, the fiscal year had started on the worst note possible, with Pakistan witnessing the most damaging floods in itshistory. World Bank and the Asian Development Bank estimated the losses rendered through the catastrophe to equalUSD 9.7bn with the agricultural sector being the worst affected. Meanwhile inability of the authorities to get theimplementation of RGST underway, along with high power sector subsidies and delay in foreign aid flows culminatedin continued government borrowings from the SBP to the tune of PKR 168bn. In turn higher government borrowingsalong with increased food prices, power tariffs and petroleum prices, led to a sharp increase in the rate of inflation to14.6% from 12.3% at the start of the year, despite the central bank raising its policy rate cumulatively by 150bps duringthe interval.

However the economy sought some relief as the situation of the country's current account continued to strengthen,culminating in an overall positive current account balance of USD 26mn for the period Jul-Dec '10. This was owingto a surge in exports and a relative lower increase in imports along with consistent inflow of robust remittances andhigher CSF receipts. Consequently, the PKR devalued only slightly by 1% against the USD during the 6 month period,the lowest rate of depreciation since 1HFY08. Combined with a steep discount of close to 50% to average regionalmarket valuations on PER basis, the local markets experienced heavy FPI inflows which drove the market index upwards.

Fund Performance

The Fund earned a net income of Rs. 29.659 million during the period under review compared to net income of Rs.44.957 million during the same period last year. The net assets of the Fund were Rs. 574.022 million as on December31, 2010 compared to Rs. 646.203 million as on June 30, 2010 showing a decline of 11.17%. The net asset value(NAV) per unit as on December 31, 2010 was Rs. 110.27 as compared to ex-distribution NAV of Rs. 103.17 per unitas on June 30, 2010 showing an increase of 6.88%. The Fund underperformed its benchmark return by 2.71% duringthe period ended December 31, 2010.

Fund and Asset Manager Rating

PACRA has assigned a capital protection rating of "AAA (cp)" to JS Capital Protected Fund IV. The fund's rating denotesexceptionally strong certainty of capital protection.

JCR-VIS Credit Rating Company Limited has assigned Management Quality Rating of "AM2-"(AM-Two Minus) to JSInvestments Limited. The rating denotes high management quality of the Management Company.

Acknowledgment

We wish to express our gratitude to the employees of the Management Company and the trustee for the dedicationand hard work and the unit holders for their confidence in the Management.


On behalf of the Board

Rashid MansurChief Executive OfficerKarachi: February 15, 2011

05

REPORT OF THE TRUSTEE TO THE UNIT HOLDERS

Report of the Trustee Pursuant to Regulation 41(h) of the Non-Banking Finance Companies and NotifiedEntities Regulations, 2008

JS Capital Protected Fund IV, an open end scheme established under a Trust Deed dated February 19, 2008 executedbetween JS Investments Limited, as the Management Company and MCB Financial Services Limited, as the Trustee.The Scheme was authorized by Securities and Exchange Commission of Pakistan (Commission) on February 19, 2008.

1.JS Investments Limited, the Management Company of JS Capital Protected Fund IV has, in all material respects,managed JS Capital Protected Fund IV during the six months period ended December 31, 2010 in accordance withthe provisions of the following:

(i) the limitations imposed on the Asset Management Company and the Trustee under the trust deed and other applicable laws;

(ii) the valuation or pricing is carried out in accordance with the deed and any regulatory requirement;

(iii) the creation and cancellation of units are carried out in accordance with the deed;

(iv) and any regulatory requirement

For the purpose of information, the attention of unit holders is drawn towards auditor's report and note 1.2 of thecondensed interim financial statements which states that the Fund is due to mature in May 2011, no adjustment hasbeen considered necessary in these condensed interim financial statements for the reason given in the above referrednote.


Khawaja Anwar HussainChief Executive Officer

MCB Financial Services LimitedKarachi: February 09, 2011

06

AUDITORS' REPORT TO THE UNIT HOLDERS ON REVIEW OFINTERIM FINANCIAL INFORMATION

Introduction

We have reviewed the accompanying condensed interim statement of assets and liabilities of JS Capital Protected FundIV (the Fund) as at 31 December 2010 and the related condensed interim statements of income, comprehensive income,cash flows, movement in unit holders' fund and distribution, together with the notes forming part thereof (here-in-afterreferred to as "interim financial information") for the six-months' period then ended. Management Company (JS InvestmentsLimited) is responsible for the preparation and presentation of this interim financial information in accordance withapproved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to expressa conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of InterimFinancial Information Performed by the Independent Auditor of the Entity". A review of interim financial informationconsists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analyticaland other review procedures. A review is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing and consequently does not enable us to obtain assurance that we would becomeaware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financialinformation is not prepared, in all material respects, in accordance with approved accounting standards as applicablein Pakistan for interim financial reporting.

Emphasis of Matter

Without qualifying our conclusion we draw attention to note 1.2 to the condensed interim financial statements, whichindicate that although the Fund is due to mature in May 2011, no adjustment in this respect has been considerednecessary in these condensed interim financial statements for the reason given in the above referred note.


Ernst & Young Ford Rhodes Sidat HyderChartered AccountantsKarachi: February 15, 2011

CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIESAS AT DECEMBER 31, 2010

07

Note

Bank balances 4 15,438,721 20,450,245Term deposits 5 465,507,065 540,029,561Investments 6 94,188,634 96,907,670Dividend Receivable - 2,367,906Deposit, prepayment and other receivable 174,964 184,468Deferred formation cost 316,200 835,816Total assets 575,625,584 660,775,666

Remuneration payable to the Management Company 109,989 93,056Remuneration payable to the Trustee 75,122 81,811Payable against redemption of units - 1,051,149Payable against purchase of securities - 10,027,373Accrued and other liabilities 1,418,006 3,319,118Total liabilities 1,603,117 14,572,507

Net assets 574,022,467 646,203,159

Unit holders' fund 574,022,467 646,203,159

Number of units in issue 5,205,624 5,740,227

Net asset value per unit 110.27 112.57

Contingency 7 - -

The annexed notes from 1 to 11 form an integral part of these condensed interim financial statements.


31 December2010

30 June2010

-----------Rupees----------- (Un-Audited) (Audited)

Assets

Liabilities

For JS Investments Limited(Management Company)

ChairmanChief Executive OfficerMunawar Alam SiddiquiRashid Mansur

Income

Markup / interest income on bank balances, term deposits and investments 29,284,914 31,130,632 15,391,892 14,998,548Dividend income 1,435,000 1,798,000 1,135,000 1,513,000Net gain on investments at fair value through income statement (held-for-trading)- Net gain on sale of investments 4,193,479 18,685,016 (134,790) 12,253,470- Net unrealised gain / (loss) on revaluation of investments 4,926,339 4,684,994 5,291,589 (11,330,018)

9,119,818 23,370,010 5,156,799 923,452

Element of loss and capital loss included - in prices of units sold less those in units redeemed - net (4,120,369) (3,272,533) (272,676) (1,748,680)

35,719,363 53,026,109 21,411,015 15,686,320

Remuneration of the Management Company 5,187,144 5,907,286 2,498,512 2,933,373Remuneration of the Trustee 481,952 557,389 233,321 275,019Annual fee of Securities & Exchange Commission of Pakistan 222,306 253,169 107,079 125,716Securities transaction cost 402,604 582,449 77,968 401,408Listing fee 20,242 10,120 10,122 5,060Bank charges 32,854 14,631 6,745 7,855Bank charges on early redemption of term deposits 214,010 - - -Amortisation of deferred formation cost 519,616 519,616 259,808 259,808Auditors' remuneration 135,600 176,230 47,464 80,155Printing and stationery 28,311 48,490 619 20,798Advertisement 3,432 - 3,432 -Mutual fund rating fee 63,014 - 31,507 -Reversal of contribution to Workers' Welfare Fund 7 (1,250,821) - - -

6,060,264 8,069,380 3,276,577 4,109,192

Net income for the period 29,659,099 44,956,729 18,134,438 11,577,128


08

CONDENSED INTERIM INCOME STATEMENT (UNAUDITED)FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note


Quarter Ended 31 December

2010 31 December

2009

Half Year Ended 31 December

2010 31 December

2009--------------Rupees-------------- --------------Rupees--------------



Expenses

09

CONDENSED INTERIM STATEMENT OF COMPREHENSIVEINCOME (UNAUDITED)

FOR THE HALF YEAR ENDED 31 DECEMBER 2010


Net income for the period 29,659,099 44,956,729 18,134,438 11,577,128

Other comprehensive income for the period

Net unrealised gain / (loss) on revaluation of investment classified as available-for-sale 1,810 - (2,348) -

Transferred to income statement on maturityof available -for-sale investments (118) - - -

1,692 - (2,348) -

Total comprehensive income for the period 29,660,791 44,956,729 18,132,090 11,577,128


Half Year Ended Quarter Ended 31 December

2010 31 December

2009 31 December

2010 31 December

2009--------------Rupees-------------- --------------Rupees--------------



Cash flows from operating activities

Net income for the period 29,659,099 44,956,729

Adjustments for:Markup / interest income on bank balances, term deposits and investments (29,070,904) (31,130,632)Dividend income (1,435,000) (1,798,000)Net gain on sale of investments (4,193,479) (18,685,016)Net unrealised gain on revaluation of investments (4,926,339) (4,684,994)Element of loss and capital loss included in prices of units sold less those in units redeemed - net 4,120,369 3,272,533Amortisation of deferred formation cost 519,616 519,616

(34,985,737) (52,506,493)

Decrease in assets

Receivable against sale of securities - 1,105,360Deposit, prepayment and other receivable 43,255 (134,880)

43,255 970,480

Increase / (decrease) in liabilitiesRemuneration payable to the Management Company 16,933 (902,106)Remuneration payable to the Trustee (6,689) (1,015)Payable against redemption of units - (1,989,357)Accrued and other liabilities (12,979,634) (438,272)

(12,969,390) (3,330,750)(18,252,773) (9,910,034)

Sale of investments 461,474,066 154,150,343Purchase of investments (446,594,027) (215,004,201)Early redemption of term deposits 79,063,047 52,002,246Return on bank balances and term deposits received 21,457,109 10,145,165Dividend received 3,802,906 1,798,000Net cash inflow / (used in) operating activities 100,950,328 (6,818,481)

Cash flows from financing activities

Payments on redemption of units (105,961,852) (52,490,245)

Net decrease in cash and cash equivalent (5,011,524) (59,308,726)

Cash and cash equivalent at the beginning of the period 20,450,245 63,394,372

Cash and cash equivalent at the end of the period 15,438,721 4,085,646


10

CONDENSED INTERIM CASH FLOW STATEMENT (UNAUDITED)



31 December2010

31 December2009

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



11

CONDENSED INTERIM STATEMENT OF MOVEMENT INUNIT HOLDERS' FUND (UNAUDITED)



Net assets as at the beginning of the period 646,203,159 663,185,353

Issue of 523,002 (2009: 32,207) bonus units - -Redemption of 1,057,605 (2009:519,434) units (105,961,852) (52,490,245)

(105,961,852) (52,490,245)

Element of loss and capital loss included in prices of units sold less those in units redeemed - net 4,120,369 3,272,533


Other Comprehensive income 1,692 -

Total comprehensive income for the period 29,660,791 44,956,729

Net assets as at the end of the period 574,022,467 658,924,370

Net assets as at the end of the period consist of:

Capital account 520,562,385 609,626,151

Undistributed income 37,120,165 46,533,210

Back end load - special reserve account 16,339,917 2,765,009

574,022,467 658,924,370


31 December2010

31 December2009

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



CONDENSED INTERIM DISTRIBUTION STATEMENT (UNAUDITED)


12


Undistributed income brought forward 61,419,197 4,836,477

Distribution @ Rs. 9.40 per unit declared on 7 July 2010 (2009: Rs. 0.50)- Bonus Units (53,958,131) (3,259,996)


Undistributed income carried forward 37,120,165 46,533,210


31 December2010

31 December2009

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



13

NOTES TO THE CONDENSED INTERIM FINANCIALSTATEMENT (UNAUDITED)FOR THE HALF YEAR ENDED 31 DECEMBER 2010

1. LEGAL STATUS AND NATURE OF BUSINESS

1.1 JS Capital Protected Fund IV (the Fund) was established under the Non-Banking Finance Companies (Establishmentand Regulation) Rules, 2003 as an open-end unit trust scheme. It was constituted under a Trust Deed, dated 19February 2008 between JS Investments Limited as the Management Company, a company incorporated underthe Companies Ordinance , 1984 and the MCB Financial Services limited as the trustee, also incorporated underthe Companies Ordinance, 1984. The registered office of the Management Company is situated at 7th Floor,The Forum, Clifton, Karachi.

1.2 The Fund aims at protecting investors' capital by placing a significant percentage of the Fund as bank deposit(s)or in other fixed income instruments, and uses the remaining funds for investments into equity markets or anyother permissible investment instruments. The duration of the fund is three years and six weeks from the last dayof initial public offering i.e. 18 April 2008. Accordingly the Fund shall automatically stand dissolved in May2011.However, the management believes the said dissolution of the Fund does not require any adjustment inthese interim condensed financial statements for the reason that the carrying value of asset and liabilities are notmaterially different from the respective realizable / settlement amounts.

1.3 After the initial subscription the public sale of units has been discontinued. The sale of additional units if allowedduring the tenure of the Fund will be at the discretion of the management company. The units can also beredeemed by surrendering them to the Fund subject to back end load as per the offering document. The unitsare listed on Lahore Stock Exchange.

2. BASIS OF PREPARATION

2.1 These Condensed interim Financial statements have been prepared in accordance with International AccountingStandard - 34 "Interim financial Reporting" as applicable in Pakistan.

2.2 These condensed interim financial statements do not include all the information and disclosures required in theannual financial statements and should be read in conjunction with the financial statements of the Fund for theyear ended 30 June 2010.

2.3 These condensed interim financial statements are unaudited but subject to limited scope review by the auditors.

3. ACCOUNTING POLICIES

The accounting policies adopted for the preparation of these condensed interim financial statements are consistentwith those followed in the preparation of the Fund's annual financial statements for the year ended 30 June 2010.

The Fund has adopted the following amended IFRS and IFRIC interpretation which became effective during theperiod:

- IAS 32-Financial Instruments: Presentation - Classification of Rights Issues (Amendment)- IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments

In April 2009, the IASB issued amendments to various standards primarily with a view to removing inconsistenciesand clarifying wording. These improvements are listed below:

IFRS 5 - Non-Current Assets Held for Sale and Discontinued OperationsIFRS 8 - Operating SegmentsIAS 1 - Presentation of Financial StatementsIAS 7 - Statement of Cash FlowsIAS 17 - LeasesIAS 36 - Impairment of AssetsIAS 39 Financial Instruments: Recognition and Measurement

The adoption of the above standards, amendments / improvements and interpretations did not have any effecton these condensed interim financial statements.


14

4. BANK BALANCES 4.1 15,438,721 20,450,24515,438,721 20,450,245

4.1 These carry rate of return ranging between 5.00% to 11.50% (June 2010: 5.00% to 11.25%) per annum.

5. TERM DEPOSITS

Principal amount 5.1 356,937,313 436,000,360Accrued return 108,569,752 104,029,201

465,507,065 540,029,561

5.1 Represents term deposits with commercial bank carrying interest rate at the rate of 10.75% per annum on theprincipal amount and accrued interest. These deposits will mature in May 2011. During the period, term depositsamounting to Rs. 79,063,047/- were redeemed before the maturity date.

6. INVESTMENTS

At fair value through income statementHeld-for-trading

Listed equity securities - held for trading 6.1 35,035,234 76,914,110

Available for Sale

Available-for-sale Government securities 6.2 59,153,400 19,993,56094,188,634 96,907,670


31 December2010

(Un-Audited)

30 June2010

(Audited)

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

15


Oil and GasAttock Petroleum Limited (a related party) 28,000 12,000 400 40,000 400 133,808 0.02 0.001Attock Refinery Limited - 70,000 - 70,000 - - - -Pakistan Oilfields Limited - 76,500 - 26,500 50,000 14,798,000 2.58 0.021Pakistan Petroleum Limited 20,000 92,000 5,400 85,000 32,400 7,035,660 1.23 0.003Pakistan State Oil Limited 30,000 49,000 - 79,000 - - - -

21,967,468 3.83

ChemicalsEngro Corporation Limited 50,000 72,000 - 122,000 - - - -Fauji Fertilizer Company Limited 141,000 1,348 - 142,348 - - - -ICI Pakistan Limited - 45,476 - 35,000 10,476 1,511,058 0.26 0.008

1,511,058 0.26

Construction and MaterialsLucky Cement limited (a related party) 15,000 132,000 - 97,000 50,000 3,789,500 0.66 0.015D.G Khan Cement Company Limited 230,000 351,580 - 581,580 - - - -

3,789,500 0.66

Personal GoodsNishat Mills Limited 47,000 213,978 - 205,988 54,990 3,528,708 0.61 0.016

Fixed Line TelecommunicationPakistan Telecommunication Company Limited 450,000 50,000 - 500,000 - - - -

ElectricityHub Power Company Limited 250,000 100,000 - 350,000 - - - -Nishat Chunian Power Limited - 150,000 - - 150,000 2,413,500 0.42 0.041

2,413,500 0.42

BanksBank Alfalah Limited - - - - - - - - MCB Bank Limited 50,000 30,000 - 75,000 5,000 1,142,700 0.20 0.001National Bank of Pakistan - 50,000 - 50,000 - - - -United Bank Limited - 30,000 - 20,000 10,000 682,300 0.12 0.001

1,825,000 0.32

Carrying value of investments as at 31 December 2010 35,035,234 6.10

Purchase cost of investments as at 31 December 2010 30,108,896

6.1 Listed equity securities*

*Ordinary shares have a face value of Rs. 10/- each unless stated otherwise.

% of investee Capital

% of Net

Assets

Carrying value as at

31 December 2010 (Rupees)

At the end of the

period

Disposed during the

period

Bonus received

during the period

Acquired during the

period

At the beginning

of the period

Number of shares

6.2 Government Securities(Face value of Rs. 100,000/- each)

Market Treasury Bills 200 3,300 2,900 600 59,153,400 10.31

6.2.1 These securities have a maturity period of 3 months to 6 months with a yield ranging from 12.84% to 13.65% (2010 : 12%) per annum

At thebeginning

of the period

Acquired during the

period

Matured/ disposed during

the period

At the end of the

period

Carrying Value as at

31 December 2010 (Rupees)

% of Net

Assets

----------------Number of certificates----------------

16


7. REVERSAL OF CONTRIBUTION TO WORKERS' WELFARE FUND

The Finance Act 2008 introduced an amendment to the Workers' Welfare Fund Ordinance, 1971 (WWF Ordinance).As a result of this amendment it is alleged that all Collective Investment Schemes / mutual funds (CISs) whose incomeexceeds Rs.0.5 million in a tax year, have been brought within the scope of the WWF Ordinance, thus renderingthem liable to pay contribution to WWF at the rate of two percent of their accounting or taxable income, whicheveris higher. In this regard, a constitutional petition has been filed by certain CISs through their trustees in the HonorableHigh Court of Sindh, challenging the applicability of WWF to the CISs, which is pending adjudication. However,without prejudice to the above, the Management Company made a provision for WWF contribution in the annualfinancial statements for the year ended 30 June 2010.

Subsequent to the year ended June 30, 2010, a clarification was issued by the Ministry of Labour and Manpower(the Ministry) which stated that mutual funds are not liable to contribute to WWF on the basis of their income. Thisclarification was forwarded by Federal Board of Revenue (FBR) (being the collecting agency of WWF on behalf ofthe Ministry) vide its letter dated 06 October 2010 to its members for necessary action. Based on this clarification,the FBR also withdrew notice of demand which it had earlier issued to one of the mutual funds for collection of WWF.However, the FBR vide its letter dated 04 January 2011 have cancelled its earlier letter dated 06 October 2010ab initio and issued show cause notices to certain mutual funds for collecting WWF. In respect of such show causenotices, one of the mutual fund has been granted stay by Honorable High Court of Sindh vide its order dated 10February 2011 on the basis of the pending constitutional petition in the said court as referred above and the remainingmutual funds are in the process of filing petitions for stay of proceedings in this case.

In view of the afore mentioned developments during the period, the Management Company now believes that thereis no compelling reason to retain provision on account of WWF contribution in the financial statements. Further,the Management Company also expects that the constitutional petition pending in the Honorable High Court ofSindh on the subject as referred above will be decided in favour of the mutual funds. Accordingly, the managementhas reversed the provision recognised as at June 30, 2010 amounting to Rs.1.25 million during the current period.The aggregate unrecognised amount of WWF as at December 31, 2010 amounted to Rs.1.81million.

8. TAXATION

The Fund is exempt from taxation under clause 99 of the Part I of the 2nd Schedule to the Income Tax Ordinance,2001, subject to the condition that not less than 90% of its accounting income as reduced by the realised andunrealised capital gain for the year is distributed amongst the Fund's unit holders. The Fund has availed suchexemption in the past and intends to continue the same in current and future financial periods. Accordingly, noprovision is made for current and deferred taxation in these financial statements.

9. TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS

Related parties / connected persons include JS Investments Limited being the Management Company, MCB FinancialServices Limited being the Trustee, Jahangir Siddiqui and Company Limited being the holding company of theManagement Company, associates of the Management Company and its holding company, other funds beingmanaged by the Management Company and Key Management Personnel.

Transactions for the period

JS Investments LimitedRemuneration of the Management Company 5,187,144 5,907,286Bonus units 9,611,006 508,711Redemption of units during the period 102,347,004 -Expenses incurred 3,432 6,957

JS Fund of FundsTransfer in of units 5,452,412 -

Half year ended

31 December2010

31 December2009

--------Rupees--------(Un-Audited)

MCB Financial Services LimitedRemuneration of the Trustee 481,952 557,389

JS Bank LimitedIncome on bank balances 317,161 982,558

Attock Petroleum LimitedDividend Income 40,000 285,000

Lucky Cement LimitedDividend Income 80,000 -

JS Global Capital LimitedBrokerage commission - see note 9.1 43,781 17,460Transfer in of units 91,492,255 -

Balance as at Period / Year Ended

JS Investments LimitedOutstanding units-at net assets value 10,272,420 115,096,903Formation cost payable 1,070,266 1,070,267Remuneration payable 109,989 93,056

MCB Financial Services LimitedRemuneration payable to the Trustee 75,122 81,811

JS Bank LimitedBank Balance 152,962 10,485,458Profits Receivable 35,786 10,480

JS Fund of FundsOutstanding units-at net asset value 5,641,448 -

JS Global Capital LimitedOutstanding units-at net asset value 98,370,232 -

17


31 December2010

(Un-Audited)

30 June2010

(Audited)

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

31 December2010

31 December2009

--------Rupees--------(Un-Audited)



18


9.1 The amount disclosed represents the amount of brokerage expense and not the purchase or sale value of securitiestransacted through them. The purchase or sale value have not been treated as transactions with related party asultimate counter-parties are not known.

9.2 The transactions with related parties / connected persons are in the normal course of business at contracted rates.

10. GENERAL

10.1 Figures of the condensed interim income statement and condensed interim statement of comprehensive incomefor the quarters ended 31 December 2010 and 31 December 2009 have not been subject to limited scopereview by the auditors.

10.2 Figures have been rounded off to the nearest Rupee.

11. DATE OF AUTHORISATION FOR ISSUE

These condensed interim financial statements were authorised for issue by the Board of Directors of the ManagementCompany on February 15, 2011.

js capital protected fund iv - js investments · 2011-03-01 · js capital protected fund iv 02 in...

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