CHUNDRIGAR ROAD SAVINGS FUND CHUNDRIGAR ROAD …bmafunds.com/FINR/BCSF-March-2017.pdfmillion. In addition, the fund booked an element of loss and capital losses from the issue and

1

CHUNDRIGAR ROAD SAVINGS FUND CHUNDRIGAR ROAD SAVINGS FUND

Management CompanyBMA Asset Management Company Limited801 Unitower. 1.1. Chundrigar Road,Karachi-74000Board of Directors of the Management CompanyMr. Muhammad Iqbal ChairmanMr. Zouhair Abdul Khaliq DirectorMr. Salim Khan DirectorMr. Muddassar Malik DirectorMr. Khaldoon Bin Latif Chief Executive OfficerAudit Committee of the Management CompanyMr. Zouhair Abdul Khaliq ChairmanMr. Muhammad Iqbal MemberMr. Muddassar Malik MemberHuman Resource and Remuneration CommitteeMr. Salim Khan ChairmanMr. Muhammad Iqbal MemberMr. Muddassar Malik MemberManagement Team of the Management CompanyMr. Farrukh Hussain Chief Investment OfficerMr. Faisal Ali Khan CFO & Company SecretaryTrusteeMCB Financial Services LimitedTrustee Office 4th Floor, Pardasi House, M.T Khan Road, KarachiBankersSummit Bank LimitedBank Islami Pakistan LimitedJS Bank LimitedBank AI-Habib LimitedFaysal Bank LimitedMCB Bank LimitedBank Alfalah LimitedSilk Bank LimitedHabib Bank LimitedAskari Bank LimitedZarai Taraqiati Bank LimitedDistributorsBMA Capital Management LimitedPyramid Financial Consultants (Pvt) LimitedTopline Securities LimitedAuditorsA.F. Ferguson & Co., Chartered AccountantsState Life Building No. 1-C, 1.1. Chundrigar Road KarachiLegal AdviserKMS Law Associates207, Beaumont Plaza behind PIDC House, KarachiRegistrarTechnology Trade (Pvt.) LimitedDagia House, 241 C, Block 2, PECHS KarachiFund Stability RatingA+(f)Management Quality RatingAM3

FUND’S INFORMATION

CONTENTS

FUND'S INFORMATION

MISSION STATEMENT

REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANY

INDEPENDENT AUDITORS' REPORT TO THE UNIT HOLDERS ON REVIEW OFCONDENSED INTERIM FINANCIAL INFORMATION

REPORT OF THE TRUSTEE TO THE UNIT HOLDERS

CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES

CONDENSED INTERIM INCOME STATEMENT

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

CONDENSED INTERIM DISTRIBUTION STATEMENT

CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDER'S FUND

CONDENSED INTERIM CASH FLOW STATEMENT

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

Meezan Bank LimitedFinca Micro Finance Bank LimitedU Micro Finance Bank LimitedTameer Micro Finance Bank LimitedDubai Islamic Bank Pakistan Limited

Icon Securities (Pvt) Ltd.Rabia Fida

1

2

3

8

9

10

11

12

13

14

15

16

3


2

MISSION STATEMENT

The BMA Chundrigar Road Savings Fund seeks to provide its investors attractive riskadjusted income through investments in fixed income instruments having moderate levelof risk profile. The benchmark of the Fund is an average of one year KIBOR rateprevailing within the particular time period. The Fund will seek to maint ain a rupee-weighted average maturity of investment port folio of not more than 5 years.

VISION STATEMENT

BMA Asset Management seeks to establish itself as a leader within the asset managementindustry of Pakistan by following the principles of prudent investment practice andkeeping our fiduciary responsibility towards our investors as the core belief to ourinvestment philosophy.

REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANY

The Board of Directors of BMA Asset Management Company Limited, the Management Comp any of BMAChundrigar Road Savings Fund (BCSF), is pleased to present it s report and financial statements of the Fundfor the period ended March 31, 2017.

PROFILEThe launch announcement of the BMA Chundrigar Road Savings Fund ("BCSF") was made on 14 August, 2007,Pakistan's 60th year of independence and BCSF was formally launched on 23rd August of the same year. TheBCSF seeks to provide its investors with an attractive rate of return by investing in all fixed income and moneymarket instruments of low risk and medium term duration. The fund's aim is to maintain a rupee-weighted averagematurity for the investment portfolio of not more than 5 years. The benchmark for our return is one year KIBOR.

FUND'S FINANCIAL PERFORMANCEDuring the nine months ended March 31, 2017, the Fund earned Rs. 22 million from income on investments,bank balances and term deposits. The fund also booked realized and unrealized loss of 1.12 million. Thus thetotal income earned came to Rs. 20.91 million.

Total expenses of BCSF for the period came to Rs.15.60 million. This included remunerations to the trustee ofthe fund of Rs. 0.52, fee to the SECP of Rs. 0.21, and remuneration to the management company of Rs. 4.21million. In addition, the fund booked an element of loss and capital losses from the issue and redemption of unitswhich totaled Rs.8.85 million. During the 3QFY17 fund also reverse liability of Federal Workers' Welfare Fundamounting Rs 0.14 mn and record new liability of Sindh Workers Welfare Fund amounting Rs. 0.35 mn as perIndustry practice.

Resultantly, the net income for the period was Rs. 5.31 million.

INVESTMENT STRATEGYDuring the period under review, the fund aimed to maintain major exposure in high yield deposits and mediumto longer tenor sovereign bonds to capitalize declining interest rate scenario effectively while selectively deployingassets in high yielding instruments. This enabled the fund to generate a superior rate of return while ret ainingboth liquidity and its ability to respond quickly in any uncertain macroeconomic environment. During the 3Q ofFY17, major exposure was maint ained in high yield deposit s to avoid volatility exist in secondary market.

As of 31st March, the weighted average maturity of BCSF portfolio was 181 days. This was in order to optimizebenefit from the prevailing adjustments in yield curve.

As of March 31st, 2017, the net assets of the fund were Rs. 136.2 million, 49.31% of these assets were held inBank Deposits, 29.35% in TDR, 14.10% in Commercial paper, 5.14% in PIBs and 2.10% in others instruments.In line with this asset allocation, the credit quality of the fund remained high with 74.40% allocated to A, 5.14%in AAA, 3.7% in AA+, 14.67% in A- and 2.1% in unrated instruments.

RETURN DURING THE PERIOD FOR INVESTORSDuring 9MFY17, the Fund generated an annualized return of 5.41%% against the benchmark of 6.41%. Theforgoing performance is net of all expenses.

RECENT DEVELOPMENTSDue to possible reversal in yield curve we have rebalanced BCSF portfolio to avoid interest rate risk and availopportunity of higher deposit rates from leading financial institution, as a result the fund managed to providehandsome return in 9MFY17 and maintain its position in the top quartile among aggressive fixed income fundcategory. We believe that monetary easing cycle is almost over now and no immediate reversal in discount rateexpected by the end of FY17. We have reduced exposure in PIB and gradually increasing exposure in floatingrate instruments. Because of this, the fund's ability to meet redemptions and remain flexible in an uncert ainmacroeconomic environment remained intact.

MACROECONOMIC OUTLOOKThe inflation maintained its reversal during 3QFY17, as the average CPI for 3QFY17 stood at 4.27% YoY against3.73% YoY during the same period last year . Housing, Water, Electricity, Gas & Fuels head which constitute29.4% of the index went up by 3.9% during 9MFY17. Other major contributors to 9MFY17 inflation were 12.5%increase in health cost (mainly on account of price hike of different medicines), and 3.7% increase in transporthead. We expect inflation to remain in manageable range of 4.1%-4.4% during FY17, however , continuedrecovery in commodity prices and expected rupee devaluation can put some inflationary pressure during FY18.

5


4

The State Bank of Pakistan (SBP) kept the policy rate unchanged for the 5th consecutive time at 5.75% in it slatest (Mar'17) Monetary Policy for the next two months. According to latest MPS released by SBP, real economicactivity is gathering pace on the back of better agricultural output, growth in key LSM sectors, and a healthyuptick in the credit to private sector. However, drop in exports along with continuous rise in imports has widenedthe current account deficit (CAD). Therefore, maintaining its cautious stance the SBP has kept the policy rateunchanged, which is in line with the market expectations. We believe manageable inflation outlook in near futurehas waved off any chances of hike in policy rate till Sept '17.

Current account deficit was recorded at USD 2.59bn during 3QFY17, depicting deterioration of 13% QoQ despiteof coalition support fund (CSF) inflow of USD 550mn. Widening of CAD can mainly be attributed to 11% QoQsurge in imports. Resultantly 9MFY17 CAD has mounted to USD 6.13bn as against the deficit of USD 2.35bnduring the same period last year. Going forward, hike in import bill due to increase in oil prices and decliningexports will prompt further weakness in CAD, though contained somewhat by seasonal recovery in remittanceduring 4QFY17.

By the end of 3QFY17, country's forex reserves have slipped to USD 21.55bn, after attaining peak levels of USD24bn in Oct'16. With total external debt payments of ~5.7bn due in FY18 along with widening CAD might putsome pressure on country's reserves and exchange rate. On the fl ipside, the government recently revised itsfiscal deficit target up to 4.1% of GDP from earlier 3.8% of GDP mainly due to shortfall in tax collection so far(PKR168bn in 9MFY17). Tax shortfall and other fiscal slippages can widen the deficit beyond the revised target.

STRATEGY

In light of the above macroeconomic scenario, BCSF's strategy is likely to focus on the following;

• Build exposure in high quality , shorter to medium term instrument s, keeping in mind an appropriaterisk/reward ratio.

• To transform portfolio allocation largely towards floating rate instrument s to avoid interest rate risk.• Decrease duration with the intention of trading in fixed and floating rate instruments to take advantage of

rebound in policy rate.

AcknowledgementThe Board is thankful to its valued investors, the Securities and Exchange Commission of Pakistan, the Trusteesof the Fund, MCB Financial Services Limited and the Registrar, Technology Trade (Pvt) Limited. The Directorsof the Management Company also acknowledge the efforts put in by the team of the Management Comp anyfor the meticulous management of the Fund.

For and on behalf of the Board

Karachi Khaldoon-Bin-LatifApril 21, 2017 Chief Executive Officer

6

CHUNDRIGAR ROAD SAVINGS FUNDCONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIESAS AT MARCH 31, 2017

For BMA Asset Management Company Limited(Management Company)

Khaldoon Bin LatifChief Executive Officer

Salim KhanDirector

8

CHUNDRIGAR ROAD SAVINGS FUNDCONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2017

CHUNDRIGAR ROAD SAVINGS FUND

7

CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2017


Chief Executive Officer Director



10


CONDENSED INTERIM DISTRIBUTION STATEMENT (UN-AUDITED)FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2017


9

CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2017





12

CHUNDRIGAR ROAD SAVINGS FUNDNOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTSFOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2017

1 LEGAL STATUS AND NATURE OF BUSINESS

1.1 BMA Chundrigar Road Savings Fund (the Fund) was established in Pakistan under a Trust Deed executedbetween BMA Asset Management Company Limited, as the Management Company and MCB FinancialServices Limited, as the Trustee. The Trust Deed was executed and approved by the Securities andExchange Commission of Pakistan (SECP) in accordance with the Non-Banking Finance Comp anies(Establishment and Regulation) Rules, 2003 (NBFC Rules).

The Management Company of the Fund is licensed to carry out Asset Management Services as a NonBanking Finance Company under the NBFC Rules through a certificate of registration issued by the SECP.The registered office of the Management Company is situated at 801 Unitower , I. I. Chundrigar Road,Karachi. The Management Company is a member of the Mutual Funds Association of Pakistan (MUFAP).

The Fund is an open-ended money market mutual fund listed on the Karachi Stock Exchange (now PakistanStock Exchange). Units of the Fund are offered for public subscription on a continuous basis. The unitsof the Fund are transferable and can be redeemed by surrendering these to the Fund. The Fund iscategorised as an 'Aggressive Fixed Income Scheme' as per the criteria laid down by the SECP forcategorisation of Collective Investment Schemes (CISs).

The Fund seeks to provide attractive income to investors having concern for preservation of capit al byinvesting in all fixed income and money market instrument s of low risk and short duration to generateattractive rates of returns.

Pakistan Credit Rating Agency Limited has assigned a rating of A+(f) and AM3 to the Fund and theManagement Company respectively.

Title to the assets of the Fund is held in the name of MCB Financial Services Limited as Trustee of theFund.

2 BASIS OF PREPARATION

2.1 Statement of compliance

This condensed interim financial information has been prepared in accordance with the approved accountingstandards as applicable in Pakistan for interim financial reporting. Approved accounting standards compriseof such International Financial Reporting Standards (IFRS) issued by the International Accounting StandardsBoard as are notified under the Comp anies Ordinance, 1984, the requirements of the Trust Deed, theNBFC Rules, the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the NBFCRegulations) and the directives issued by the SECP. Wherever the requirements of the Trust Deed, theNBFC Rules, the NBFC Regulations or the directives issued by the SECP differ with the requirements ofIFRS, the requirements of the Trust Deed, the NBFC Rules, the NBFC Regulations or the directives issuedby the SECP prevail.

This condensed interim financial information does not include all the information and disclosures requiredin the annual financial statements and should be read in conjunction with the annual published financialstatements of the Fund for the year ended June 30, 2016.

This condensed interim financial information is unaudited but has been subjected to a limited scope reviewby the auditors.

In compliance with Schedule V of the Non-Banking Finance Companies and Notified Entities Regulations,2008, the directors of the Management Comp any hereby declare that this condensed interim financialinformation gives a true and fair view of the state of the Fund’s affairs as at March 31, 2017.


11

CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUND (UN-AUDITED)FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 2017



14

CHUNDRIGAR ROAD SAVINGS FUNDCHUNDRIGAR ROAD SAVINGS FUND

13

3 SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES, ESTIMATES, JUDGMENTS ANDCHANGES THEREIN

3.1 The accounting policies applied in the preparation of this condensed interim financial information are thesame as those applied in the preparation of the annual published audited financial statements of the Fundfor the year ended June 30, 2016.

3.2 The preparation of this condensed interim financial information in conformity with the approved accountingstandards requires the management to make estimates, judgments and assumptions that affect the reportedamounts of assets and liabilities, income and expenses. It also requires the management to exercisejudgment in application of its accounting policies. The estimates, judgments and associated assumptionsare based on historical experience and various other factors that are believed to be reasonable under thecircumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision af fects only thatperiod, or in the period of revision and future periods if the revision affects both current and future periods.

3.3 The significant estimates, judgments and assumptions made by management in applying the accountingpolicies and the key sources of estimation uncertainty were the same as those that applied to the financialstatements as at and for the year ended June 30, 2016.

3.4 The financial risk management objectives and policies are consistent with those disclosed in the annualpublished audited financial statements of the Fund for the year ended June 30, 2016.

3.5 Standards, interpretations and amendments to published approved accounting standards that are effectivein the current period

3.5.1 There are certain amended standards and interpretations that are mandatory for the accounting periodsbeginning on or after July 1, 2016 but are considered not to be relevant or will not have any significanteffect on the Fund's operations and are, therefore, not detailed in this condensed interim financial information.

3.6 Standards, interpretations and amendments to published approved accounting standards that are not yeteffective

There are certain amended standards and interpretations that are mandatory for the accounting periodsbeginning on or after July 1, 2017 but are considered not to be relevant or will not have any significanteffect on the Fund's operations and are, therefore, not detailed in this condensed interim financial information.

4.1 Profit rates on these savings accounts range between 3.75% to 7.50% per annum (June 30, 2016: 3.75%to 6.65% per annum).

16


15

5.5 Commercial Paper

This Commercial paper issued by Pak Electron Limited has been purchased during the period carryingyield of 7.89% per annum maturing on October 09, 2017.

5.6 Term deposit

Profit rate on the term deposit accounts are 9.75 -10.25% having maturities on September 26, 2017 andSeptember 27, 2017 respectively.

7.1 The Management Company is entitled to remuneration for services rendered to the Fund under Regulation61 of the Non-Banking Finance Comp anies and Notified Entities Regulations, 2008, of an amount notexceeding 3 percent of the average daily net assets of the Fund during the first five years of the Fund'sexistence and thereafter of an amount equal to 2 percent of such asset s of the Fund. The rate used bythe Management Company (and the Fund) is 1.5 % (2015: 1.5%) per annum of the average daily netassets of the Fund as disclosed in the offering document.

7.2 Sindh sales tax at the rate of 13% (2016: 14%) is p ayable on the remuneration of the ManagementCompany.

7.3 The Finance Act, 2013 enlarged the scope of Federal Excise Duty (FED) on financial services to includeAsset Management Companies (AMCs) with effect from 13 June 2013. As the asset management servicesrendered by the Management Company of the Fund were already subject to provincial sales tax on serviceslevied by the Sindh Revenue Board, which is being charged to the Fund as explained in note 7.2 above,the Management Company was of the view that further levy of FED was not justified.

On 4 September 2013, a Constitutional Petition was filed in the Honourable Sindh High Court (SHC) jointlyby various asset management companies, together with their representative Collective Investment Schemesthrough their trustees, challenging the levy of FED.

During the half year ended 31 December 2016, the SHC passed an order whereby all notices, proceedingstaken or pending, orders made, duty recovered or actions t aken under the Federal Excise Act, 2005 inrespect of the rendering or providing of services (to the extent as challenged in any relevant petition) wereset aside. In response to this, the Deputy Commissioner Inland Revenue has filed a Civil Petition for leaveto appeal in the Supreme Court of Pakistan which is pending adjudication.

With effect from 1 July 2016, FED on services provided or rendered by non-banking financial institutionsdealing in services which are subject to provincial sales tax has been withdrawn by the Finance Act, 2016.

In view of the above, the Fund has discontinued making further provision in respect of FED on remunerationof the Management Company with effect from 1 July 2016. However, as a matter of abundant caution theprovision for FED made for the period from 13 June 2013 till 30 June 2016 amounting to Rs 2.403 million(30 June 2016: Rs 2.403 million) is being retained in the books of the Fund as the matter is pending beforethe Supreme Court of Pakistan. Had the said provision for FED not been recorded in the condensed interimfinancial information of the Fund, the net asset value of the Fund as at 31 March 2017 would have beenhigher by Re 0.15 per unit.

8.1 The Finance Act, 2008 had introduced an amendment to the W orkers' Welfare Fund Ordinance, 1971(WWF Ordinance) as a result of which it was construed that all Collective Investment Schemes (CISs) /mutual funds whose income exceeded Rs 0.5 million in a t ax year were brought within the scope of theWWF Ordinance, thus rendering them liable to pay contribution to WWF at the rate of two percent of theiraccounting or taxable income, whichever was higher . In light of this, the Mutual Funds Association ofPakistan (MUFAP) filed a constitutional petition in the Honourable Sindh High Court (SHC) challengingthe applicability of WWF on CISs which is pending adjudication. Similar cases were disposed of by thePeshawar and the Lahore High Court s in which these amendment s were declared unlawful andunconstitutional. However, these decisions were challenged in the Supreme Court of Pakistan.

Subsequently, the Finance Act, 2015 introduced an amendment under which CISs / mutual funds havebeen excluded from the definition of “industrial establishment” subject to WWF under the WWF Ordinance.Consequently, mutual funds are not subject to this levy after the introduction of this amendment which isapplicable from tax year 2016. Accordingly, no further provision in respect of WWF was made with effectfrom July 1, 2015.

On November 10, 2016 the Supreme Court of Pakist an (SCP) has passed a judgment declaring theamendments made in the Finance Acts 2006 and 2008 pertaining to WWF as illegal citing that WWF wasnot in the nature of tax and could, therefore, not have been introduced through money bills. Accordingly,the aforesaid amendments have been struck down by the SCP. The Federal Board of Revenue has fileda petition in the SCP against the said judgment, which is pending for hearing. While the petitions filed bythe CISs on the matter are still pending before the SHC, the Mutual Funds Association of Pakistan (MUFAP)(collectively on behalf of the asset management companies and their CISs) has taken legal and tax opinionson the impact of the SCP judgement on the CISs petition before the SHC. Both legal and t ax advisorsconsulted were of the view that the judgment has removed the very basis on which the demands wereraised against the CISs. Therefore, there was no longer any liability against the CISs under the WWFOrdinance and that all cases pending in the SHC or lower appellate forums will now be disposed of in lightof the earlier judgement of the SCP.

Furthermore, as a consequence of the 18th amendment to the Constitution of Pakistan, in May 2015 theSindh Workers’ Welfare Fund Act, 2014 (SWWF Act) had been passed by the government of Sindh as a

18


17

result of which every industrial establishment located in the Province of Sindh, the total income of whichin any accounting year is not less than Rs 0.50 million, is requ ired to pay Sindh Workers’ Welfare Fund(SWWF) in respect of that year a sum equal to two percent of such income. The matter was taken up bythe MUFAP with the Sindh Revenue Board (SRB) collectively on behalf of various asset managementcompanies (including the Management Company of the Fund) whereby it was contested that mutual fundsshould be excluded from the ambit of the SWWF Act as these were not industrial establishments but werepass through investment vehicles and did not employ workers. The SRB held that mutual funds wereincluded in the definition of financial institutions as per the Financial Institution (Recovery of Finances)Ordinance, 2001 and were, hence, required to register and pay SWWF under the SWWF Act. Thereafter,MUFAP has taken up the matter with the Sindh Finance Ministry to have mutual funds excluded from theapplicability of SWWF.

In view of the above developments regarding the applicability of Federal and SWWF on Mutual Funds andconsidering the legal opinion obtained on these matters, MUFAP has recommended the following to allits members on January 12, 2017:

- based on the legal opinion, the entire provision against WWF held by the CISs till 30 June 2015, tobe reversed on 12 January 2017; and

- the provision in respect of SWWF should be made with ef fect from the date of enactment of theSWWF Act, 2014 (i.e. starting from May 21, 2015) on January 12, 2017.

Accordingly, the provision for SWWF is being made by the Funds on a daily basis going forward.

The above decisions were communicated to the SECP and the Pakistan Stock Exchange Limited on 12January 2017 and the SECP vide its letter dated 1 February 2017 has advised MUFAP that the adjustmentsrelating to the above should be prospective and supported by adequate disclosures in the financialstatements of the CISs/ mutual funds. Accordingly, the Fund has recorded these adjustments in its bookson 12 January 2017.

9 CONTINGENCIES AND COMMITMENTS

There were no contingencies and commitments outstanding as at March 31, 2017 and June 30, 2016.

10 NET ASSET VALUE PER UNIT

The net asset value (NAV) per unit, as disclosed on the Statement of Asset and Liabilities, is calculatedby dividing the net assets of the Fund by the number of units in issue at the period / year end.

11 TAXATION

The Fund's income is exempt from Income Tax as per clause (99) of part I of the Second Schedule to theIncome Tax Ordinance, 2001 subject to the condition that not less than 90% of the accounting income forthe year as reduced by capit al gains whether realized or unrealized is distributed to the unit holders(excluding distribution made by issuance of bonus units). The Fund is also exempt from the provisions ofsection 113 (minimum tax) under clause 11A of Part IV of the Second Schedule to the Income Tax Ordinance.The management intends to distribute at least 90% of the aforementioned net accounting income earnedby the Fund to the unit holders. Accordingly, no provision for current and deferred tax has been made inthis condensed interim financial information.

12 EARNINGS PER UNIT

Earnings per unit (EPU) for the period ended March 31, 2016 has not been disclosed as in the opinion ofthe management, determination of cumulative weighted average number of outstanding units for calculatingEPU is not practicable.

13 TOTAL EXPENSE RATIO

In accordance with regulation 60 (5) of the amended NBFC Regulations 2008 the Total Expense Ratio(excluding government levies) of a aggressive fixed income scheme is to be capped at 2% of the dailyaverage net assets of the fund during the period. The Total Expense Ratio of BMA Chundrigar Road SavingsFund for the period ended March 31, 2017 is 2.36% which includes 0.36% representing government levyand SECP fee. The expenses of the fund exceeds the 2% cap by Rs 305,003 which has been recordedas a recievable from the management company.

14 TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS

14.1 Related parties / Connected persons comprise of BMA Asset Management Company Limited (theManagement Company), BMA Empress Cash Fund, BMA Capital Management Limited (the holdingcompany of the Management Comp any), BMA Financial Services Limited, BMA Funds Limited, MCBFinancial Services Limited (Trustee), BMA Asset Management Company Limited - Staff Provident Fund,BMA Capital Management Limited - Staff Provident Fund, entities having 10% or more of the unit holdingof the Fund and key management personnel of the Management Company.

14.2 The transactions with related parties / connected persons are in the normal course of business, at contractedrates and terms determined in accordance with market rates.

14.3 Remuneration to the Management Company and the Trustee is determined in accordance with the provisionsof the NBFC Regulations and the Trust Deed.

14.4 Details of transactions with related parties / connected persons are as follows:

20


19

14.5 In addition to the above, there are certain other transactions and balances with related parties which havebeen disclosed in the respective notes.

15 FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the amount for which an asset could be exchanged, or liability can be settled, betweenknowledgeable willing parties in an arm's length transaction. Consequently, differences can arise betweencarrying values and the fair value estimates.

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

Financial assets which are traded in an open market are revalued at the market prices prevailing on thereporting date. The estimated fair value of all other financial asset s and liabilities is considered notsignificantly different from the carrying values as the items are either short term in nature or periodicallyrepriced.

Fair value of investments is determined as follows:

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

- Investment in Term Finance Certificates and Sukuks are valued on the basis of rates determined bythe Mutual Fund Association of Pakistan (MUFAP) in accordance with the methodology prescribedby SECP for valuation of debt securities. In the determination of rates MUF AP takes into accountthe holding pattern of these securities and categorizes them as traded, thinly traded and non tradedsecurities

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

15.1 Fair value hierarchy

International Financial Reporting Standard 13, 'Fair Value Measurement' requires the Fund to classifyassets using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.The fair value hierarchy has the following levels:

Level 1: Fair value measurements using quoted price (unadjusted) in an active market for identicalassets or liabilities.

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

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


21

16 GENERAL

16.1 Figures have been rounded off to the nearest Rupee.

16.2 Corresponding figures have been rearranged , wherever necessary, for the purpose of comparison andbetter presentation. No significant reclassifications have been made during the current period

17 DATE OF AUTHORISATION

This condensed interim financial information has been authorized for issue by the Board of Directors ofthe Management Company on April 25, 2018.



Documents

CHUNDRIGAR ROAD SAVINGS FUND CHUNDRIGAR ROAD …bmafunds.com/FINR/BCSF-March-2017.pdfmillion. In addition, the fund booked an element of loss and capital losses from the issue and