JS Islamic Fund - JS Investments Limited (JSIL)jsil.com/downloads/reports/2014/AR_ISF.pdf1st Floor Shaikh Sultan Trust Building # 2 Beaumont Road, Karachi - 75530, Pakistan Legal Advisers

CONTENTSVision and Mission Statement

Organization

Directors' Report to the Unit Holders

Fund Manager's Report

Performance Table / Key Financial Data

Review Report to the Unit holders on Statement of Compliance with Best Practices of Code of Corporate Governance

Statement of Compliance with the Code of Corporate Governance

Report of the Shariah Supervisory Council

Statement of Compliance with Shariah Principles

Independent Assurance Provider’s Report on Shariah Compliance of the Unit Holders

Trustee Report to the Unit Holders

Independent Auditors' Report to the Unit Holders

Statement of Assets and Liabilities

Income Statement

Statement of Comprehensive Income

Statement of Cash Flows

Statement of Movement in Unit Holders' Fund

Distribution Statement

Notes to the Financial Statements

02

03

04

07

10

11

12

14

15

16

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18

20

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23

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25

26

Annual Report 2014 01

JS Islamic Fund

VISIONTo be recognized as a responsible asset manager respected for continuingly realizing goalsof its investors.

MISSIONTo build JS Investments into a top ranking Asset Management Company; founded on soundvalues; powered by refined knowhow; supported by a committed team operating withinan accountable framework of social, ethical and corporate responsibility - a strong andreliable institution for its shareholders to own; an efficient service provider and valuecreator for clients; an exciting and fulfilling work place for employees; and a participantworth reckoning for competitors.

BROAD POLICY OBJECTIVESValue creation for clients on a sustainable basisMaintain high standards of ethical behaviors and fiduciary responsibilityManage Investments with Prudence and with the aim of providing consistent returnsbetter than that of peersTake Products and Services to the People, Create awareness on understanding financialgoals, risks and rewardsProfessional Excellence - Adapt, Evolve and Continuously ImproveMaintain highly effective controls through strong compliance and risk managementA talented, diligent and diverse HR

02 Annual Report 2014

JS Islamic Fund

ORGANIZATION


JS Islamic Fund

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

Board of Directors Nazar Mohammad Shaikh ChairmanAli Akhtar Ali Chief Executive OfficerSuleman LalaniAhsen AhmedAsif Reza SanaKamran JafarMuhammad Khalil Ur RehmanMuhammad Raza Dyer

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

Chief Financial Officer& Company Secretary Muhammad Khawar Iqbal

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

Auditors KPMG Taseer Hadi & Co.Chartered Accountants1st Floor Shaikh Sultan Trust Building # 2Beaumont Road, Karachi - 75530, Pakistan

Legal Advisers Bawaney & Partners3rd & 4th Floors,68-C, Lane-13,Bokhari Commercial Area,Phase-VI, DHA, Karachi.

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

Shariah Supervisory Council Muhammad Taqi Usmani ChairmanAbdullah Najeeb-ul-Haq Siddiqui MemberMuhammad Mohibul Haq Siddiqui Member

DIRECTORS’ REPORT TO THE UNIT HOLDERS

The Board of Directors of JS Investments Limited, the Management Company of JS Islamic Fund (the Fund), is pleased to presentthe Annual Report for the year ended June 30, 2014.

Equity Market ReviewThe KMI-30 Index posted a returned of 29.9% in FY14, another year of above average returns although it exhibited volatilitytowards the end of 4QFY14. Foreign inflows were quite robust in FY14 which helped propel the index to all time highs. Averagedaily volumes for the KMI-30 Index increased by a significant 56% YoY to average 65.4 million shares in FY14, from 41.8 millionshares in FY13 due to higher foreign participation along with improving local retail activity. Total foreign portfolio inflows forFY14 clocked in at USD 256 million in the local equity market.

In 4QFY14, the KMI-30 posted a return of 11.2% on account of some very strong foreign inflows especially in the Oil sector.Volatility kicked in towards the middle of 4QFY14 due to uncertainty regarding Capital Gains Tax (CGT) increase. However, whenthe Federal Budget was announced the uncertainty dissipated resulting in increasing foreign and local interest in the equitymarkets. Foreign inflows for 4QFY14 were recorded at USD 233 million, one of the strongest quarterly flows in recent times.

In addition, secondary market offerings for both United Bank Limited (UBL) and Pakistan Petroleum Limited (PPL) were completedin June-14, with a cumulative equivalent of USD 542 million raised through both transactions. The successful completion ofthese transactions bodes well for the Government of Pakistan's (GoP) privatization program in the coming months. The UBLsell-off of 19.8% shareholding of the government of Pakistan was done at an 8% discount to the market price, with 30% over-subscription. Although there was healthy local participation, foreign funds picked up almost 80% of the shares. PPL's transactiongenerated more demand than expected, with 100% over-subscription against the government's offering of 70 million shares.As a result, the strike price came in higher than the market close, a first in Pakistan's privatization history.

Review of Fund PerformanceThe net asset value ("NAV") per units has increased by Rs. 38.4% inclusive of interim distribution from beginning ex-distributionNAV of Rs. 60.70 per unit as on June 30, 2013 to NAV of Rs. 69.33 as on June 30, 2014. The Fund outperformed its benchmarkreturn by 8.54%. The net assets of the Fund were Rs.447 million as on June 30, 2014 compared to Rs.362.5 million as on June30, 2013. JS Islamic Fund has also been awarded as the best Equity Pakistan Fund over 2 years by LIPPER; Global Islamic in 2014.

The Fund has paid interim distribution of Rs.14.50 per unit. As the distribution is more than 90% of the realized income for theyear, the income of the Fund will not be subject to tax under Clause 99 of Part 1 of the Second Schedule of Income Tax Ordinance,2001.

Fund and Asset Manager RatingThe Pakistan Credit Rating Agency (PACRA) assigned the star ranking of 3 Star (Short Term) and 2 Star (Long Term) to the fundthrough a press release dated November 18, 2013.

JCR-VIS Credit Rating Company Limited has reaffirmed Management Quality Rating of "AM2-"(AM-Two Minus) to JS InvestmentsLimited through a press release dated August 20th, 2014. The rating denotes high management quality of the ManagementCompany.

Corporate Governance and Financial Reporting FrameworkThe Board of Directors of the Management Company states that:

a. The Finance Act 2008 introduced an amendment to the Workers' Welfare Fund Ordinance, 1971 (WWF Ordinance). As aresult of this amendment it may be construed 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 rendering themliable to pay contribution to WWF at the rate of two percent of their accounting or taxable income, whichever is higher.In this regard, a constitutional petition has been filed by certain CISs through their trustees in the Honourable HighCourt of Sindh (the Court), challenging the applicability of WWF to the CISs, which is pending for adjudication.

During the year 2011, a single bench of the Lahore High Court (LHC) in a constitutional petition relating to the amendmentsbrought in the WWF Ordinance, 1971 through the Finance Act, 2006, and the Finance Act 2008, has declared the saidamendments as unlawful and unconstitutional and struck them down. However, in the month of March 2013, a larger


JS Islamic Fund

Name

Mr. Malik Zafar Javed

Designation

Head of Operations

Units Held

71,830

bench of the Sindh High Court (SHC) in various constitutional petitions declared that amendments brought in the WWFOrdinance, 1971 through the Finance Act, 2006, and the Finance Act 2008, do not suffer from any constitutional or legalinfirmity and overruled a single-member Lahore High Court (LHC) bench judgment issued in August 2011.

However, as per the advice of legal counsel of MUFAP, the stay granted to CIS (as mentioned in the first paragraph)remains intact and the constitution petitions filed by the CIS to challenge the Workers Welfare Fund contribution havenot been affected by the SHC judgment.

As the matter relating to levy of WWF is currently pending in the Court, the Management Company, as a matter ofprudence and abundant caution, has decided to recognize the entire liability of Rs. 9.9 million in these financial statements.

b. The financial statements, prepared by the Management Company, present fairly the state of affairs of the Fund, the resultsof its operations, cash flows and movement in net assets of the Fund.

c. Proper books of accounts of the Fund have been maintained.d. Appropriate accounting policies have been consistently applied in preparation of financial statements, and accounting

estimates are based on reasonable and prudent judgment.e. International Financial Reporting Standards, as applicable in Pakistan, provisions of the Non-Banking Finance Companies

(Establishment & Regulation) Rules, 2003, Non-Banking Finance Companies and Notified Entities Regulations, 2008requirements of the trust deed and the financial statements, prepared by the Management Company, present fairly thestate of affairs of the fund, the result of its operations, cash flows and movement in net assets of the fund.

f. The system of internal control is sound in design and has been effectively implemented and monitored.g. There are no significant doubts upon the Fund's ability to continue as a going concern.h. There has been no material departure from the best practices of the Code of Corporate Governance, as detailed in the

listing regulations.i. A performance table / key financial data is given on page 10 of this annual report.j. The Pattern of unit holding as at June 30, 2014 as per the requirements of Clause {(xvi)(j)} is disclosed in Annexure I to

the published financial statements.k. Units held by the Chief Executive, directors and executives and their spouses and minor children as at June 30, 2014 are

as follows:

i. Units acquired/redeemed during the year by the Chief Executive, directors and executives, their spouses and minorchildren are as follows.

Name

Arsalan Asif Soomro

Malik Zafar Javed

Designation

Fund Manager

Head of Operation

Units Sold

14,778

64,464

Units Acquired

14,778

123,729

Meetings of the DirectorsDuring the year 10 meetings of the Board of Directors were held. The details of meetings of board and its committees aredisclosed in the Annexure of the financial statements.

Distribution to Charitable InstitutionsWith the consent of the Shariah Supervisory Council, during the current year the Non Shariah Compliant income amountingto Rs.100,000 had been distributed among the following charitable institutions


JS Islamic Fund

AuditorsThe external auditors of the Fund Messrs KPMG Taseer Hadi & Co, Chartered Accountants, retire and being eligible offersthemselves for reappointment. The Board of Directors, upon recommendation of the Audit Committee of the Board has approvedthe appointment of KPMG Taseer Hadi & Co., Chartered Accountants, as the Fund's auditors for the ensuing year ending June30, 2015.

Shariah Supervisory CouncilThe Shariah Supervisory Council (SSC) of the fund completed its tenure. The Board of Directors of JS Investment Limited, theManagement Company of the Fund, upon recommendation of the Audit Committee has approved the appointment of ShariahSupervisory for the ensuing year ending June 30, 2015.

AcknowledgmentThe Directors express their gratitude to the Securities and Exchange Commission of Pakistan for its valuable support, assistanceand guidance. The Board also thanks the employees of the Management Company for their dedication and hard work and theunit holders for their confidence in the Management.

Ali Akhtar AliKarachi: August 15, 2014 Chief Executive Officer


JS Islamic Fund

Sind Institute of Urology and Transplantation

Friends of Burns Centre

Al-Shifa Trust Eye Hospital

Shaukat Khanum Memorial Cancer Hospital & Research Centre

The Kidney Centre

Total

20,000

20,000

20,000

20,000

20,000

Rs. 100,000

FUND MANAGER’S REPORT


JS Islamic Fund

• Category and Type of Collective Investment SchemeShariah Compliant Islamic - Equity Scheme / Open end

• Objective of Collective Investment Scheme'sJS Islamic Fund [JS ISF] aims to grow investor's capital in the long term in adherence with principles of Shariah complianceas advised by the Shariah Advisory Council (SAC) of this fund. The fund investments are limited to asset classes approvedby the Shariah Advisory Council (SAC) and all companies under investment consideration are semiannually screened forShariah compliance.

• Explanation as to whether the Collective Investment Scheme has achieved its stated objectiveThe collective investment scheme achieved its stated objective.

• Benchmark(s) relevant to the Collective Investment Scheme.KMI30 Index

• Comparison of the Collective Investment Scheme's performance during the period compared with the saidbenchmarks

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun '13 '13 '13 '13 '13 '13 '14 '14 '14 '14 '14 '14

JSISF 15.4% -12.0% 1.6% 1.0% 10.1% 4.8% 5.6% -3.3% 7.4% 3.5% 0.8% 0.7%BM 11.1% -6.9% -3.0% 5.1% 5.1% 4.3% 4.1% -2.9% 4.0% 3.3% 1.9% 1.5%Diff. 4.3% -5.1% 4.6% -4.0% 4.9% 0.5% 1.5% -0.4% 3.4% 0.1% -1.1% -0.8%

• Strategies and policies employed during the period under review in relation to the Collective Investment Scheme'sperformanceThe Fund Manager's strategy for the Investment decision making entails a multi-faceted dashboard that involvesdecomposition of the macroeconomic, micro economic, global commodity trends, political assessment, market dynamicsand segregation of short and long term horizons, liquidity factors and regulatory limits. The variables that may impact thereturn of the investors are individually assessed and then merged along with other factors to devise a decisive and optimumasset allocation that would provide above-peer returns. The key focus of the stock selection falls upon expected upcomingtriggers in the profitability of the investee companies. Such a strategy involves taking higher then benchmark's exposureto mid-cap-growth stocks which have embedded key triggers to be unfolded in the medium term, as well as, capitalisingon the short term market corrections which render a value stock attractively cheap. With the unfolding of the event, thegeneral market participants thus form a view and start accumulating the shares at higher price by incorporating thechanges in the current variable - which we had forecasted earlier. Such market dynamics enable us to ride the first leg ofshare price appreciation in a far shorter horizon vis-a-vis the peers. Noteworthily, the Fund may continue to hold onto suchhidden gems for a passage of time as the turnaround in the profitability usually entails a gestation period of months, tosay the least. However, once the story is reflected in the financial statements, the fund delivers far superior returns vis-a-vis peers as well as the benchmark. Since the broader index has entered a maturity phase, it is empirically proven that thelarge-cap-slow-moving-companies hardly deliver the performance deemed required by an emerging market investor withhigh risk-appetite. Therefore, the stock selection of the Fund is slightly curved towards such mid-caps that provide longterm value accretion to the investors overcoming the herd and passive investment strategies.

• Collective Investment Scheme's asset allocation as at the date of the report and particulars of significant changesin asset allocation since the last report (if applicable)

Jun - 1 3 Jun - 1 4Cash 3.14% 9.63%Equity 96.10% 89.75%Other including receivables 0.76% 0. 62%Total 100.00% 100.00%


JS Islamic Fund

• Collective Investment Scheme's performance

66.1%-37.1%20.2%24.6%

1.0BenchmarkFund

0.822.0%15.4%

-28.7%69.1%% Positive Months

Largest Month LossLargest Month GainStandard DeviationBeta

• Changes in total NAV and NAV per unit since the last review period or since commencement (in the case of newlyestablished Collective Investment Scheme)

446,968,974 362,466,151 69.33 72.70

30 Jun '14Net Assets (PKR)

30 Jun '13 30 Jun '1330 Jun '14NAV per unit (PKR)

• Investment MarketsThe KMI-30 Index posted a return of 29.9% in FY14, another year of above average returns although it exhibited volatilitytowards the end of 4QFY14. The index continued to be propelled to all time highs in the face of strong Foreign portfolioinflows in FY14. Average daily volumes for the KMI-30 Index increased by a significant 56% YoY to clock in at 65.4 millionshares in FY14, from 41.8 million shares in FY13 due to higher foreign participation along with improving local retail activity.Total foreign portfolio inflows for FY14 clocked in at USD 256 million in the local equity market.

Looking at performance in 4QFY14, the KMI-30 posted a return of 11.2% on account of some very strong foreign inflowsespecially in the Oil sector. Volatility kicked in towards the middle of 4QFY14 due to uncertainty regarding Capital GainsTax (CGT) increase. However, after announcement of the the Federal Budget clarity was restored and the uncertaintydissipated. This resulted in increasing foreign and local interest in the equity markets. Foreign inflows for 4QFY14 wererecorded at USD 233 million, one of the strongest quarterly flows in recent times.

In addition, secondary market offerings for both United Bank Limited (UBL) and Pakistan Petroleum Limited (PPL) werecompleted in June-14, with a cumulative equivalent of USD 542million raised through both transactions. The successfulcompletion of these transactions bodes well for the Government of Pakistan's (GoP) privatization program in the comingmonths.

The UBL sell-off of 19.8% shareholding of the government of Pakistan was done at an 8% discount to the market price,with 30% over-subscription. Although there was healthy local participation, foreign funds picked up almost 80% of theshares which continues to show strong foreign interest in efficiently run Pakistani banks.

On the other hand, PPL's transaction generated more demand than expected, with 100% over-subscription against thegovernment's offering of 70 million shares. The local investors exhibited strong interest in PPL. As a result, the strike pricecame in higher than the market close, a first in Pakistan's privatization history.

• Distribution (if any), comprising:-- particulars of income distribution or other forms of distribution made and proposed during the period; and- statement on effects on the NAV before and after distribution is made

Distribution

The Fund has paid an interim distribution of Rs. 14.50 per unit of Rs. 100/- each i.e. 14.50%. The totaldistribution for FY14 to Rs. 14.50 per unit.

NAV per unit as on June 30, 2014Cum NAV (PKR) 69.33

Ex-NAV (PKR) 69.33


JS Islamic Fund

• Significant changes in the state of affairs of the Collective Investment Scheme during the period and up till thedate of the manager's report, not otherwise disclosed in the financial statementsThere were no significant changes in the state of affairs during the year under review.

• Breakdown of unit holdings by size

JS ISF

0.0001 - 9,999.9999 38310,000.0000 - 49,999.9999 5150,000.0000 - 99,999.9999 8100,000.0000 - 499,999.9999 6500,000.0000 & Above 2

Total 450

RangesNumber of investors

• Unit split (if any), comprising:-The Fund has not carried out any share split exercise during the year.

• Circumstances that materially affect any interests of the unit holdersInvestment is subject to market risk.

• Disclosure if the Asset Management Company or its delegate, if any, receives any soft commission (i.e. goods andservices) from its broker(s) or dealer(s) by virtue of transactions conducted by the Collective Investment Scheme,disclosure of the following:-The Management Company and / or any of its delegates have not received any soft commission from its brokers / dealersby virtue of transactions conducted by the Fund.

PERFORMANCE TABLE / KEY FINANCIAL DATA


JS Islamic Fund

Net assets - Rupees in '000

Total realized income / (loss) - Rupees in '000

Total unrealized gain / (loss) in portfolio - Rupees in '000

Total expenses - Rupees in '000

Net income / (loss) - Rupees in '000

Total expense to net assets ratio (%)

Total dividend distribution - Rupees in '000

Accumulated capital growth - Rupees in '000

Outstanding Units

Units in issue June 30th - Number

Data Per Unit

Net assets value - Rupees

Net income / (loss) - Rupees

Stock / cash dividend - Rupees

Date of announcement of stock / cash dividend

Dividend as % of NAV at the beginning of the year

Selling price as at June 30 - Rupees

Repurchase price as at June 30 - Rupees

Highest issue price during the year - Rupees

Lowest issue price during the year - Rupees

Higest redemption price during the year - Rupees

Lowest redemption price during the year - Rupees

2014 2013 2012 2011 2010 2009 2008 2007

446,969 362,466 256,868 235,616 382,507 346,371 792,963 916,369

67,546 61,267 28,928 36,158 110,550 (186,694) 96,080 197,818

46,325 58,845 20,230 43,181 (49,518) (71,960) (129,261) 21,601

16,503 18,236 7,784 7,218 16,502 11,360 32,184 37,451

124,116 121,024 (44,289) 177,730 66,338 (270,014) (65,365) 181,968

3.69 5.03 3.03 3.06 4.31 3.28 4.06 4.09

76,715 59,828 - 121,245 60,212 - - 187,262

(148,532) (195,931) (257,125) (212,836) (269,321) (275,447) (5,433) 59,932

6,446,853 4,985,682 5,139,943 2,879,938 5,524,029 5,818,555 7,591,825 6,299,615

69.33 72.70 49.97 81.81 69.24 59.53 104.45 145.46

19.25 24.27 (8.62) 61.71 12.01 (46.40) (8.60) 28.80

14.50 12.00 - 42.10 10.90 - - 29.73

June 26 July 8 July 9 July 6 July 7 July 7 July 9 July 72014 2013 2012 2011 2010 2009 2008 2007

21.20 19.77 - 72.16 18.31 - - 25.00

71.41 74.89 51.47 84.27 71.32 61.32 107.58 149.83

69.33 72.70 49.97 81.81 69.24 59.53 104.45 145.46

88.53 78.28 52.43 86.49 85.29 101.81 131.70 150.38

62.27 51.48 48.81 59.81 62.25 49.70 101.14 115.28

85.95 76.00 50.90 83.97 82.80 98.85 127.86 146.00

60.45 49.98 47.38 58.06 60.44 48.25 98.19 111.92

- The income distribution have been shown against the year to which they relate although these were declared and distributed subsequently to the year end.

- JS Islamic Fund was launched on December 27, 2002.

- All previous years' figures have been restated due to change in par value from Rs. 500 to Rs. 100 with effect from February 20, 2010.

- Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as go up.

Years(Rs. in ‘000’ )

REVIEW REPORT TO THE UNIT HOLDERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICESOF CODE OF CORPORATE GOVERNANCE


JS Islamic Fund

We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of CorporateGovernance ("the Code") prepared by the Board of Directors of the Management Company of JS Islamic Fund ("the Fund")for the year ended 30 June 2014 to comply with the listing regulation No. 35 of Lahore Stock Exchange, where the Fundis listed.

The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of theManagement Company of the Fund. Our responsibility is to review, to the extent where such compliance can be objectivelyverified, whether the Statement of Compliance reflects the status of the Fund's compliance with the provisions of theCode of Corporate Governance and report if it does not and to highlight any non compliance with the requirements ofthe Code. A review is limited primarily to inquiries of the Fund personnel and review of various documents prepared bythe Fund to comply with the Code.

As part of our audit of financial statements we are required to obtain an understanding of the accounting and internalcontrol systems sufficient to plan the audit and develop an effective audit approach. We are not required to considerwhether the Board's statement on internal control covers all risks and controls, or to form an opinion on the effectivenessof such internal controls, the Fund's corporate governance procedures and risks.

The Code requires the Management Company to place before the Audit Committee, and upon recommendation of theAudit Committee, place before the Board of Directors for their review and approval of related party transactionsdistinguishing between transactions carried out on terms equivalent to those that prevailed in arm's length transactionsand transactions which are not executed at arm's length price and recording proper justification for using such alternatepricing mechanism. We are only required and have ensured compliance of this requirement to the extent of approval ofthe related party transactions by the Board of Directors upon recommendation of the Audit Committee. We have notcarried out any procedures to determine whether the related party transactions were undertaken at arm's length priceor not.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliancedoes not appropriately reflect the Fund's compliance, in all material respects, with the best practices contained in theCode of Corporate Governance for the year ended 30 June 2014.

Further, we highlight below instances of non-compliance with the requirements of the Code as reflected in the paragraphreferences where these are stated in the Statement of Compliance:

a) Paragraphs 10 and 18 relating to the vacant position of Head of Internal Audit currently being headed by an acting Headof Internal Audit; and

b) Paragraph 23 relating to annual evaluation of the Board's performance as per the requirements of the Code of CorporateGovernance for which the management has approached an entity for the development of criteria for the said purpose.

KPMG Taseer Hadi & Co.Chartered Accountants

Date: August 15, 2014Karachi

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCEFOR THE YEAR ENDED JUNE 30, 2014

This statement is being presented to comply with the Code of Corporate Governance ("the Code") contained in ListingRegulations of Lahore Stock Exchange where JS Islamic Fund (the Fund) is listed. The purpose of the Code is to establisha framework of good governance, whereby a listed entity is managed in compliance with the best practices of corporategovernance.

JS Investments Limited (the Management Company) which manages the affairs of the Fund has applied the principlescontained in the Code in the following manner:

1. The Management Company encourages representation of independent non-executive directors and directors representingminority interests on its Board of directors.

At present the Board includes:

Mr. Ahsen AhmedMr. Asif Reza SanaDr. Ali Akhtar Ali - Chief Executive OfficerMr. Suleman LalaniMr. Kamran JafarMr. Muhammad Khalil Ur RehmanMr. Muhammad Raza DyerMr. Nazar Mohammad Shaikh

Independent Directors

Executive DirectorNon-Executive Directors

Category Names

2. The directors of the Management Company have confirmed that none of them is serving as a director on more than sevenlisted companies, including this Company (excluding the listed subsidiaries of listed holding companies where applicable).

3. All the resident directors of the Management Company are registered as taxpayers and none of them has defaulted inpayment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declaredas a defaulter by that stock exchange.

4. During the year the election of directors of the Company was held on December 23, 2013 upon completion of the threeyears’ term of the previous Board. In March 2014 Mr. Rashid Mansur completed his term as Chief Executive Officer (CEO)and Dr. Ali Akhtar Ali was appointed CEO from April 01 2014. No casual vacancy in the Board of the Management Companyhas occurred during the year.

5. The Management Company has prepared a "Code of Conduct", and has ensured that appropriate steps have taken placeto disseminate it throughout the Management Company along with its supporting policies and procedures.

6. The Board of the Management Company has developed a vision / mission statement, overall corporate strategy andsignificant policies of the Management Company. A complete record of particulars of significant policies along with thedates on which they were approved or amended has been maintained.

7. All the powers of the Board have been duly exercised and decisions on material transactions including the appointmentand determination of the remuneration and terms and conditions of the employment of the Chief Executive Officer andother executives and non-executive directors have been taken by the board / shareholders.

8. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Boardfor this purpose and the Board met at least once in every quarter. Written notices of the Board meetings, along withagenda and working papers, were circulated at least seven days before the meetings. The minutes of the meetings wereappropriately recorded and circulated.

9. During the year Mr. Muhammad Khalil Ur Rehman and Mr. Asif Reza Sana have completed certification from PakistanInstitute of Corporate Governance (PICG) under the criteria given in Clause (xi) of the Code


JS Islamic Fund


JS Islamic Fund

10. The Head of Internal Audit had resigned in the month of March 2013, The Management Company is in the process ofappointing a suitable candidate for this position. There was no change of Chief Financial Officer / Company Secretaryduring the year. The remuneration and terms and conditions of employment of Chief Financial Officer / Company Secretaryand Head of Internal Audit were approved by the Board.

11. The Directors Report for this period has been prepared in compliance with the requirements of the Code and fully describesthe salient matters required to be disclosed.

12. The financial statements of the Management Company were duly endorsed by Chief Executive Officer and Chief FinancialOfficer before approval of the Board.

13. The Directors, Chief Executive Officer and Executives do not hold any interest in the units of the Fund other than thosedisclosed in the Directors Report.

14. The Management Company has complied with all the corporate and financial reporting requirements of the Code.

15. The Board has formed an Audit Committee which comprises of three members, two of them are non-executive directorsand one is independent director. Chairman of the committee, Mr. Asif Reza Sana is an independent director.

16. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final resultsof the Fund and as required by the code. The terms of reference of the committee have been formed and advised to thecommittee for compliance.

17. The Board has formed a Human Resource and Remuneration Committee which comprises of three members. Two of themare non executive directors.

18. The Board has set up an effective internal audit function and is conversant with the policies and procedures of the Fund.

19. The statutory auditors of the Fund have confirmed that they have been given a satisfactory rating under the quality controlreview program of the ICAP, that they or any of the partners of the firm, their spouses and minor children do not holdshares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants(IFAC) guidelines on Code of Ethics as adopted by the ICAP.

20. The statutory auditors or the persons associated with them have not been appointed to provide other services exceptin accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines inthis regard.

21. The "closed period", prior to the announcement of interim / final results, and business decisions, which may materiallyaffect the NAV of the Fund was determined and intimated to directors, employees and stock exchange.

22. Material / price sensitive information has been disseminated among all market participants at once through stock exchange.

23. We confirm that all other applicable material principles enshrined in the Code have been complied with except those thatare not yet applicable.

Ali Akhtar AliKarachi, August 15, 2014 Chief Executive Officer


JS Islamic Fund

Shariah Review Report For The Year 2013-2014The Shariah Supervisory Council (SSC) of JS Investments Limited, through its two members, on request of the managementmade a review of the documents and the financial statements of JS Islamic Fund for the year ended June 30, 2014.

The transactions were observed to be compliant with guidelines laid down by Shariah Supervisory Council (SSC).

However action from the management is recommended on the following missing issue.

1. Improvement in Shariah compliance Mechanism under the guidance of Shariah Supervisory Council.2. Proper Shariah training for all the stake holders involved in execution of Islamic transaction.

REPOTS OF THE SHARIAH SUPERVISORY COUNCIL

Muhammad Taqi UsmaniChairman

Mohibul Haq SiddiqiMember

Abdullah SiddiqiMember

Karachi: October 14, 2014


JS Islamic Fund

STATEMENT OF COMPLIANCE WITH SHARIAH PRINCIPLES

JS Islamic Fund (the Fund) has fully complied with the Shariah Principles specified in the Trust Deed and in the guidelinesissued by the Shariah Supervisory Council for its operations, investments, bank accounts and placements made during the yearended 30 June 2014. The Shariah Supervisory Council has also confirmed that the transactions were observed to be compliantwith guidelines laid down by Shariah Supervisory Council.

Date: October 14, 2014Ali Akhtar Ali

Chief Executive Officer


JS Islamic Fund

INDEPENDENT ASSURANCE PROVIDER’S REPORT ON SHARIAH COMPLIANCE OF THE UNIT HOLDERS

We were engaged by the Board of Directors of JS Investments Limited, Management Company of JS Islamic Fund (the Fund),to report on Fund's Compliance with the Shariah principles as set out in the annexed statement prepared by the ManagementCompany for the year ended 30 June 2014 in the form of an independent reasonable assurance conclusion about whether theannexed statement presents fairly, in all material respects, the status of the Fund's compliance with Shariah principles specifiedin the Trust Deed and in the guidelines issued by the Shariah Supervisory Council as required under clause 3.2 (c) of the TrustDeed of the Fund.

Management Company's Responsibilities

The Management Company of the Fund is responsible for preparing the annexed statement that is free from material misstatementin accordance with the Shariah principles specified in the Trust Deed and in the guidelines issued by the Shariah SupervisoryCouncil. This responsibility includes designing, implementing and maintaining internal control relevant to the operations ofthe Fund in accordance with the Shariah principles and to ensure that the Fund's investments and placements are made incompliance with Shariah principles.

Our Responsibilities

Our responsibility is to examine the annexed statement prepared by the Management Company and to report thereon in theform of an independent reasonable assurance conclusion based on the evidence obtained. We conducted our engagementin accordance with International Standard on Assurance Engagements (ISAE 3000) 'Assurance Engagements Other Than Auditsor Reviews of Historical Financial Information' issued by the International Auditing and Assurance Standards Board. That standardrequires that we comply with ethical requirements, including independence requirements, and plan and perform our proceduresto obtain reasonable assurance about whether the annexed statement fairly presents the status of the Fund's compliance withthe Shariah principles specified in the Trust Deed and in the guidelines issued by the Shariah Supervisory Council.

The procedures selected depend on our judgment, including the assessment of the risks of material non-compliance withShariah principles whether due to fraud or error. In making those risk assessments, we have considered internal control relevantto the operations of the Fund in accordance with the Shariah principles in order to design assurance procedures that areappropriate in the circumstances, but not for the purposes of expressing a conclusion as to the effectiveness of the Fund'sinternal control.

The procedures performed included:

1. Checking compliance of specific guidelines issued by the Shariah Supervisory Council relating to charity, maintainingbank accounts and for making investments of the Fund.

2. Checking that the Shariah Supervisory Council has certified that transactions were observed to be compliant withguidelines laid down by Shariah Supervisory Council.

Conclusion

Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report. We believe that theevidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.In our opinion, the annexed statement, in all material respects, presents fairly the status of the Fund's compliance with theShariah principles specified in the Trust Deed and in the guidelines issued by the Shariah Supervisory Council for the year ended30 June 2014.

Other information

Shariah Supervisory Council in their report dated 30 September 2014 on the review of the documents and the financialstatements of the Fund for the year ended 30 June 2014 have recommended that improvement in Shariah compliance mechanismunder the guidance of Shariah Supervisory Council needs to be made and proper Shariah training for all the stakeholdersinvolved in execution of Islamic transaction needs to be conducted.

Date: October 14, 2014Karachi

KPMG Taseer Hadi & Co.Chartered Accountants

TRUSTEE REPORT TO THE UNIT HOLDERS


JS Islamic Fund

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

We, Central Depository Company of Pakistan Limited, being the Trustee of JS Islamic Fund (the Fund) are of the opinionthat JS Investments Limited being the Management Company of the Fund has in all material respects managed the Fundduring the year ended June 30, 2014 in accordance with the provisions of the following:

(i) Limitations imposed on the investment powers of the Management Company under the constitutive documents of theFund;

(ii) The pricing, issuance and redemption of units are carried out in accordance with the requirements of the constitutivedocuments of the Fund; and

(iii) The Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003, the Non-Banking Finance Companiesand Notified Entities Regulations, 2008 and the constitutive documents of the Fund.

Karachi, September 03, 2014

Muhammad Hanif JakhuraChief Executive Officer

Central Depository Company of Pakistan Limited

INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS


JS Islamic Fund

Report on the Financial Statements

We have audited the accompanying financial statements of JS Islamic Fund ("the Fund"), which comprise the statementof assets and liabilities as at 30 June 2014, and the related income statement, statement of comprehensive income,distribution statement, cash flow statement statement of movement in Unit Holders' Fund for the year ended 30 June2014, and a summary of significant accounting policies and other explanatory notes.

Management Company's responsibility for the financial statements

Management Company of the Fund is responsible for the preparation and fair presentation of the financial statementsin accordance with the requirements of the approved accounting standards as applicable in Pakistan and for such internalcontrol as Management Company determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with auditing standards as applicable in Pakistan. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Fund's preparation and fair presentation of the financial statements in orderto design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the Fund's internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the state of the Fund's affairs as at 30 June 2014, andof its financial performance, cash flows and transactions for the year then ended in accordance with approved accountingstandards as applicable in Pakistan.

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-BankingFinance Companies (Establishment and Regulation Rules, 2003) and Non-Banking Finance Companies and Notified EntitiesRegulations, 2008.

Date: August 15, 2014

Karachi

KPMG Taseer Hadi & Co.Chartered AccountantsAmyn Pirani

FINANCIALSTATEMENTS


JS Islamic Fund

STATEMENT OF ASSETS AND LIABILITIESAS AT 30 JUNE 2014

Note 2014 2013

Assets

Bank balances 4 44,266,869 11,822,853Investments 5 412,751,928 361,382,910Dividend and other receivables 6 254,883 239,744Security deposits 7 2,600,000 2,600,000Total assets 459,873,680 376,045,507

Liabilities

Payable to the Management Company 8 120,803 613,483Remuneration payable to the Trustee 9 70,974 60,723Annual fee payable to the Securities and Exchange Commission of Pakistan (SECP) 10 351,754 306,428Accrued expenses and other liabilities 11 12,260,255 11,444,847Payable against redemption of units 100,922 1,153,874Total liabilities 12,904,708 13,579,355

Contingency and commitment 12

Net assets Rupees 446,968,972 362,466,152

Unit holders' fund (as per statement attached) Rupees 446,968,972 362,466,152

Number of units in issue 13 Number 6,446,853 4,985,682

Net assets value per unit Rupees 69.33 72.70

The annexed notes from 1 to 20 and annexure form an integral part of these financial statements.


JS Islamic Fund

DirectorChief Executive Officer

Ali Akhtar Ali Nazar Mohammad Shaikh

For JS Investments Limited(Management Company)

INCOME STATEMENTFOR THE YEAR ENDED 30 JUNE 2014

Note 2014 2013Income

Gain on sale of held for trading investments - net 67,545,565 61,267,217Unrealised gain on revaluation of held for trading

investments - net 46,325,399 58,845,201Dividend income (held for trading) 16 12,234,225 14,988,599Return on bank balances 2,201,238 3,087,615Element of income and capital gain included in prices of

units issued less those in units redeemed - net 12,311,960 1,071,097Total income 140,618,387 139,259,729

Expenses

Remuneration of the Management Company 8 7,405,339 6,451,157Sindh sales tax on Management Company's remuneration 1,374,431 1,041,465Federal excise duty on Management

Company's remuneration 11.3 1,184,854 57,985Remuneration to the Trustee 9 754,943 703,923Annual fee to the Securities and Exchange Commission of Pakistan (SECP) 10 351,754 306,428Listing fee 30,000 30,000Bank and settlement charges 332,294 276,935Securities transaction cost 1,909,571 1,513,452Auditors' remuneration 14 495,000 457,510Mutual fund rating fee 25,000 -Printing, postage and stationery 106,632 45,950Provision for Workers' Welfare Fund 11.1 2,532,971 7,351,234Total expenses 16,502,789 18,236,039

Net income for the year before taxation 124,115,598 121,023,690

Taxation 15 - -

Net income for the year after taxation Rupees 124,115,598 121,023,690



JS Islamic Fund




STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2014

2014 2013

Net income for the year after taxation 124,115,598 121,023,690

Other comprehensive income for the year - -

Total comprehensive income for the year Rupees 124,115,598 121,023,690



JS Islamic Fund




STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2014

2014 2013

CASH FLOWS FROM OPERATING ACTIVITIESNet income for the year after taxation 124,115,598 121,023,690

Adjustments for:Gain on sale of held for trading investments - net (67,545,565) (61,267,217)Element of income and capital gain included in prices of

units issued less those in units redeemed - net (12,311,960) (1,071,097)Return on bank balances (2,201,238) (3,087,615)Dividend income (held for trading) (12,234,225) (14,988,599)Unrealised gain on revaluation of held for trading

investments - net (46,325,399) (58,845,201)(16,502,789) (18,236,039)

Sale of held for trading investments 729,714,537 514,432,835Purchase of held for trading investments (667,212,591) (560,692,883)Return received on bank balances 2,151,099 3,044,962Dividend received (held for trading) 12,269,225 15,276,099

76,922,270 (27,938,987)

(Decrease) / increase in liabilitiesPayable to the Management Company (492,680) 209,159Remuneration payable to the Trustee 10,251 3,346Annual fee payable to Securities and Exchange Commission of Pakistan 45,326 82,015Accrued expenses and other liabilities 815,408 5,511,055Payable against redemption of units (1,052,952) 1,153,874

(674,647) 6,959,449

Net cash flows from operating activities 59,744,834 (39,215,577)

CASH FLOWS FROM FINANCING ACTIVITIESAmount received on issuance of units 268,692,840 85,709,974Amount paid on redemption of units (294,750,393) (100,064,271)Distribution to unit holders' in cash (1,243,265) -Net cash flows from financing activities (27,300,818) (14,354,297)

Net increase / (decrease) in cash and cash equivalents 32,444,016 (53,569,874)

Cash and cash equivalents at beginning of the year 11,822,853 65,392,727

Cash and cash equivalents at end of the year Rupees 44,266,869 11,822,853



JS Islamic Fund




STATEMENT OF MOVEMENT IN UNITHOLDERS' FUNDFOR THE YEAR ENDED 30 JUNE 2014

2014 2013

Net assets at beginning of the year 362,466,152 256,867,856

Cash received on issuance of 5,881,892* (2013: 1,533,507) units 268,692,840 85,709,974

Cash paid on redemption of 4,420,721 (2013: 1,687,768) units (294,750,393) (100,064,271)

Element of income and capital gain included in prices ofunits issued less those in units redeemed - net (12,311,960) (1,071,097)

Distribution to unit holders' in cash (1,243,265) -

Total comprehensive income for the year (net income for theyear after taxation) 124,115,598 121,023,690

Net assets at end of the year Rupees 446,968,972 362,466,152

Ex distribution net assets value per unit at beginning of the year Rupees 60.70 49.97

Net assets value per unit at end of the year Rupees 69.33 72.70

* This includes 2,093,927 (2013: Nil) bonus units issued during the year.



JS Islamic Fund




DISTRIBUTION STATEMENTFOR THE YEAR ENDED 30 JUNE 2014

2014 2013

Deficit at beginning of the year

- Realised loss (193,195,966) (264,872,818)- Unrealised gain 57,093,195 7,746,357Total deficit at beginning of the year (136,102,771) (257,126,461)

Final distribution for the year ended 30 June 2013: Rs. 12(2012: Nil) per unit approved on 8 July 2013 (59,828,178) -

Interim distribution for the year ended 30 June 2014: Rs. 14.5(2013: Nil) per unit approved on 26 June 2014 (76,715,014) -

(272,645,963) (257,126,461)

Net income for the year after taxation 124,115,598 121,023,690

Deficit at end of the year Rupees (148,530,365) (136,102,771)

Representing:- Realised loss (207,628,698) (193,195,966)- Unrealised gain 59,098,333 57,093,195

Rupees (148,530,365) (136,102,771)



JS Islamic Fund




NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2014

1. LEGAL STATUS AND NATURE OF BUSINESS

JS Islamic Fund ("the Fund") was established under a Trust Deed executed between JS Investments Limited as managementcompany, a company incorporated under the Companies Ordinance, 1984 and the MCB Financial Services Limited(MCBFSL) as a Trustee, which is a wholly owned subsidiary of MCB Bank Limited. The Trust Deed was executed on 16December 2002 and was approved by the Securities and Exchange Commission of Pakistan (SECP) on 18 November2002 under the Asset Management Companies Rules, 1995 [replaced by the Non-Banking Finance Companies(Establishment and Regulation) Rules, 2003 (the Rules)]. During the year ended 30 June 2005 MCBFSL voluntarily retiredas a trustee of the Fund and Central Depository Company of Pakistan Limited (CDC) was appointed as a new trusteeunder an amended Trust Deed dated 28 May 2005. Accordingly the Trust Deed was approved by the SECP on 27 January2005 under the Rules.

All the activities of the Fund are undertaken in accordance with the Islamic Shariah rules and principles. The managementcompany has appointed a Shariah Supervisory Council whose advice is followed to ensure that activities of the Fundare in compliance with Shariah.

The Fund is an open end mutual fund categorised as Shariah compliant (Islamic) equity scheme and it is listed on LahoreStock Exchange. Units are offered for public subscription on continuous basis and are transferrable and can be redeemedby surrendering them to the Fund. The face value per unit has been changed from Rs 500 to Rs 100 with effect from 20February 2010.

The Management Company of the Fund has obtained license to act as an Asset Management Company under the Rulesfrom SECP. The registered office of JS Investments Limited is situated at 7th Floor, The Forum, G-20 Khayaban-e-Jami,Block-9, Clifton, Karachi.

Title to the assets of the Fund is held in the name of Central Depository Company as a trustee of the Fund.

2. BASIS OF PREPARATION

The transactions undertaken by the Fund are in accordance with the process prescribed under the Shariah guidelinesissued by the Shariah Supervisory Council.

2.1 Statement of compliance

These financial statements have been prepared in accordance with approved accounting standards as applicable inPakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issuedby the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, Non BankingFinance Companies (Establishment and Regulation) Rules, 2003 (the Rules), Non-Banking Finance Companies and NotifiedEntities Regulations, 2008 (the Regulations) and directives issued by the Securities and Exchange Commission of Pakistan(SECP). In case the requirements differ, the requirements of the Rules, the Regulations and the directives issued by theSECP shall prevail.

2.2 Basis of measurement

These financial statements have been prepared under the historical cost convention, except that investments aremeasured at fair value.

2.3 Functional and presentation currency

These financial statements are presented in Pak Rupees, which is the fund's functional and presentation currency. Allfinancial information presented in Pak Rupees has been rounded off to the nearest of rupees.


JS Islamic Fund

2.4 Use of estimates and judgments

The preparation of financial statements in conformity with approved accounting standards requires the use of criticalaccounting estimates. It also requires the Management Company to exercise its judgement in the process of applyingthe Fund's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience,including expectations of future events that are believed to be reasonable in the circumstances.

During the year, the Fund has revised the calculation of element of income and capital gains included in the prices ofunits issued less those in the units redeemed ("element") based on the resolution passed by the Board of Directors ofthe Management Company in their meeting held on 21 February 2014. As per the revised calculation element is recognisedin the income statement for the year to the extent that it is represented by income earned during the year. Previously,the element represented by income carried forward from previous periods was also recognised in the income statementfor the year.

The revised calculation, in the opinion of the management, would ensure that continuing unit holders' share ofundistributed income remains unchanged on issue and redemption of units. The change did not have a material impacton the net assets value (NAV) of the Fund. Had the calculation not been changed, the net income for the year ended 30June 2014 would have been higher by Rs. 1.78 million.

The interim financial statements of the Fund for the half year ended 31 December 2013 and three months period ended31 March 2014 did not include the effect of this change as the methodology to compute element was changed duringthe last quarter of the financial year effective from the beginning of the current year.

The areas involving a higher degree of judgement and complexity, or areas where assumptions and estimates aresignificant to the financial statements are as follows:

- Classification and valuation of investments (note 3.1 and 18.6)- Impairment of financial instruments (note 3.10)- Recognition of provision for Workers' Welfare Fund (note 11.1)- Taxation (note 3.6 and 15)- Element of income / loss (note 3.5)- Other assets (note 3.13)

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

The following standards, amendments and interpretations of approved accounting standards will be effective foraccounting periods beginning on or after 01 July 2014:

- IFRIC 21- Levies ‘an Interpretation on the accounting for levies imposed by governments’ (effective for annual periodsbeginning on or after 1 January 2014). IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities andContingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for theentity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifiesthat the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislationthat triggers the payment of the levy. The interpretation is not likely to have an impact on Fund’s financial statements.

- Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) – (effective for annual periods beginningon or after 1 January 2014). The amendments address inconsistencies in current practice when applying the offsettingcriteria in IAS 32 Financial Instruments: Presentation. The amendments clarify the meaning of ‘currently has a legallyenforceable right of set-off; and that some gross settlement systems may be considered equivalent to net settlement.The amendments are not likely to have an impact on Fund’s financial statements.

- Amendment to IAS 36 “Impairment of Assets” Recoverable Amount Disclosures for Non-Financial Assets (effective forannual periods beginning on or after 1 January 2014). These narrow-scope amendments to IAS 36 Impairment ofAssets address the disclosure of information about the recoverable amount of impaired assets if that amount is basedon fair value less costs of disposal. The amendments are not likely to have an impact on Fund’s financial statements.


JS Islamic Fund

- Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” Continuing hedge accounting afterderivative novation (effective for annual periods beginning on or after 1 January 2014). The amendments add a limitedexception to IAS 39, to provide relief from discontinuing an existing hedging relationship when a novation that wasnot contemplated in the original hedging documentation meets specific criteria. The amendments are not likely tohave an impact on Fund’s financial statements.

- Amendments to IAS 19 “Employee Benefits” Employee contributions – a practical approach (effective for annualperiods beginning on or after 1 July 2014). The practical expedient addresses an issue that arose when amendmentswere made in 2011 to the previous pension accounting requirements. The amendments introduce a relief that willreduce the complexity and burden of accounting for certain contributions from employees or third parties. Theamendments are relevant only to defined benefit plans that involve contributions from employees or third partiesmeeting certain criteria. The amendments are not likely to have an impact on Fund’s financial statements.

- Amendments to IAS 38 Intangible Assets and IAS 16 Property, Plant and Equipment (effective for annual periodsbeginning on or after 1 January 2016) introduce severe restrictions on the use of revenue-based amortization forintangible assets and explicitly state that revenue-based methods of depreciation cannot be used for property, plantand equipment. The rebuttable presumption that the use of revenue-based amortisation methods for intangibleassets is inappropriate can be overcome only when revenue and the consumption of the economic benefits of theintangible asset are ‘highly correlated’, or when the intangible asset is expressed as a measure of revenue. Theamendments are not likely to have an impact on Fund’s financial statements.

- Agriculture: Bearer Plants [Amendment to IAS 16 and IAS 41] (effective for annual periods beginning on or after 1January 2016). Bearer plants are now in the scope of IAS 16 Property, Plant and Equipment for measurement anddisclosure purposes. Therefore, a company can elect to measure bearer plants at cost. However, the produce growingon bearer plants will continue to be measured at fair value less costs to sell under IAS 41 Agriculture. A bearer plantis a plant that: is used in the supply of agricultural produce; is expected to bear produce for more than one period;and has a remote likelihood of being sold as agricultural produce. Before maturity, bearer plants are accounted forin the same way as self-constructed items of property, plant and equipment during construction. The amendmentsare not likely to have an impact on Fund’s financial statements.

- Annual Improvements 2010-2012 and 2011-2013 cycles (most amendments will apply prospectively for annual periodbeginning on or after 1 July 2014). The new cycle of improvements contain amendments to the following standards:

- IFRS 2 ‘Share-based Payment’. IFRS 2 has been amended to clarify the definition of ‘vesting condition’ by separatelydefining ‘performance condition’ and ‘service condition’. The amendment also clarifies both: how to distinguishbetween a market condition and a non-market performance condition and the basis on which a performancecondition can be differentiated from a vesting condition.

- IFRS 3 ‘Business Combinations’. These amendments clarify the classification and measurement of contingentconsideration in a business combination. Further IFRS 3 has also been amended to clarify that the standard doesnot apply to the accounting for the formation of all types of joint arrangements including joint operations in thefinancial statements of the joint arrangement themselves.

- IFRS 8 ‘Operating Segments’ has been amended to explicitly require the disclosure of judgments made bymanagement in applying the aggregation criteria. In addition this amendment clarifies that a reconciliation of thetotal of the reportable segment’s assets to the entity assets is required only if this information is regularly providedto the entity’s chief operating decision maker. This change aligns the disclosure requirements with those for segmentliabilities.

- Amendments to IAS 16’Property, plant and equipment’ and IAS 38 ‘Intangible Assets’. The amendments clarify therequirements of the revaluation model in IAS 16 and IAS 38, recognizing that the restatement of accumulateddepreciation (amortization) is not always proportionate to the change in the gross carrying amount of the asset.

- IAS 24 ‘Related Party Disclosure’. The definition of related party is extended to include a management entity thatprovides key management personnel services to the reporting entity, either directly or through a group entity.


JS Islamic Fund

- IAS 40 ‘Investment Property’. IAS 40 has been amended to clarify that an entity should assess whether an acquiredproperty is an investment property under IAS 40 and perform a separate assessment under IFRS 3 to determinewhether the acquisition of the investment property constitutes a business combination.

- The above improvements are not likely to have an impact on the financial statements of the Fund.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

3.1 Investments

3.1.1 All investments are initially recognised at cost, being the fair value of the consideration given including the transactioncost associated with the investment, except in case of held for trading investments, in which case the transaction costsare charged off to the Income Statement.

3.1.2 The Fund classifies its investments in the following categories:

Financial asset at fair value through income statement

This category has two sub-categories, namely; financial instruments held for trading, and those designated at fair valuethrough income statement upon initial recognition.

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

Investments designated at fair value through income statement 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.

After initial recognition, the investments in listed equity instruments are remeasured at fair value determined withreference to Stock Exchange quoted market prices at the close of period end. Gains or losses on remeasurement of theseinvestments are recognized in the income statement.

Available-for-sale

Other investments are classified as "available-for-sale". After initial recognition, investments classified as available-for-sale are remeasured at fair value, determined with reference to the quoted rates. Gains or losses on remeasurement ofthese investments are recognized directly in the 'Statement of Comprehensive Income' until the investment is sold,collected or otherwise disposed-off, or until the investment is determined to be impaired, at which time the cumulativegain or loss previously reported in unit holders' funds is included in the income statement.

3.1.3 Trade date accounting

All regular way purchases and sales of investments are recognised on the trade date, i.e. the date on which commitmentto purchase / sale is made by the Fund. Regular way purchases or sales of investment require delivery of securities withintwo days after transaction date as required by stock exchange regulations.

3.2 Issue and redemption of units

Units are allocated at the offer price prevalent on the day on which applications for the purchase of units are received(however units are issued on realisation of cheques). The offer price represents the net assets value of units at end ofthe day plus the allowable sales load (if any).


JS Islamic Fund

Units are redeemed at the redemption price prevalent on the day on which the applications for the redemption of unitsare received. The redemption price represents the net assets value at end of the day.

3.3 Net asset value per unit

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.

3.4 Revenue recognition

- Gain or loss on sale of investment is accounted for in the income statement in the period in which it arises.

- Unrealised gain / (loss) arising on revaluation of investment classified as held for trading is included in the incomestatement in the period in which it arises.

- Dividend income is recognized when the right to receive the dividend is established .

- Profit on bank balances are recognised at effective profit rates based on a time proportion basis.

3.5 Element of income / loss and capital gains / losses in prices of units sold less those in units redeemed

To prevent the dilution of per unit income and distribution of income already paid out on redemption, as dividend, anequalisation account called “element of income and capital gains included in prices of units sold less those in unitsredeemed” is created.

Element of income is recognised in the income statement for the year to the extent that it is represented by incomeearned during the year.

3.6 Taxation

The Fund is exempt from taxation under clause 99 of the Part I of the 2nd Schedule of the Income Tax Ordinance, 2001,subject to the condition that not less than 90% of its accounting income for the year as reduced by capital gains whetherrealised and unrealised is distributed amongst the unit holders.

The Fund is also exempt from the provisions of section 113 (minimum tax) under clause 11A of Part IV of the SecondSchedule to the Income Tax Ordinance, 2001.

3.7 Financial instruments

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 Fund ceases to be a party to such contractualprovisions of the instrument. Financial liabilities are derecognised when they are extinguished, that is, when the obligationspecified in the contract is discharged, cancelled or expired. Any gain or loss on derecognition of the financial assets andfinancial liabilities is taken to income currently.

Subsequent to initial recognition, all financial assets and financial liabilities are measured at fair value. The particularrecognition method adopted for measurement of financial liabilities investments subsequent to initial recognition isdisclosed in the individual policy statement associated with each item.

3.8 Offsetting of financial assets and liabilities

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.


JS Islamic Fund

3.9 Cash and cash equivalents

Cash and cash equivalents comprise of bank balances including term deposits with banks (with maturity period of lessthan three months from the date of deposit) that are readily convertible to known amounts of cash and are subject toan insignificant risk of changes in value.

3.10 Impairment

Impairment loss in respect of available-for-sale investments is recognised based on management's assessment ofobjective evidence of impairment as a result of one or more events that may have an impact on the estimated futurecash flows of the investments. A significant or prolonged decline in fair value of an equity investment below its cost isalso considered an objective evidence of impairment. The determination of what is significant or prolonged requiresjudgment.

In case of impairment of other available-for-sale investments, the cumulative loss that has been recognised directly instatement of comprehensive income is taken to the income statement.

Other individually significant financial assets are tested for impairment on an individual basis. The remaining financialassets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognisedin income statement.

3.11 Provisions

Provisions are recognised when the Fund has a legal or constructive obligation as a result of past events, it is probablethat an outflow of resources will be required to settle the obligation and reliable estimate of the amount can be made.Provision are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

3.12 Dividend distribution

Dividend distributions (including the bonus units) are recorded in the period in which the distributions are approved.As per regulation 63 of the Non Banking Finance Companies and Notified Entities Regulations, 2008, the Fund is requiredto distribute 90% of the net accounting income other than unrealised capital gains to the unit holders.

3.13 Other assets

Other assets are stated at cost less impairment losses, if any.

4. BANK BALANCES 2014 2013

Balances with banks in:- Profit and loss sharing accounts 4.1 42,795,366 10,871,848- Current accounts 4.2 1,471,503 951,005

Rupees 44,266,869 11,822,853

4.1 Profit and loss sharing accounts carry profit rates ranging from 5.5% to 8.65% (2013: 5% to 9%) per annum.

4.2 This includes balance of Rs. 1.05 million (2013: Rs. 0.72 million) with JS Bank Limited (related party).


JS Islamic Fund

5. INVESTMENTS 2014 2013

At fair value through income statement - held for trading

Listed equity securities 5.1 Rupees 412,751,928 361,382,910

5.1 Listed equity securities

Ordinary shares have a face value of Rs. 10/- each.

Holding Acquired Bonus Disposed Holding Market value / % ofat during received during at end Carrying total

beginning the during the the of the value investmentSectors / Companies of the year year year year year

Oil & Gas

Attock Refinery Limited - 107,000 - - 107,000 22,715,030 5.50

Pakistan Oilfields Limited 13,000 60,000 - 73,000 - - -

Pakistan Petroleum Limited 55,000 60,000 - 115,000 - - -

Pakistan State Oil Company Limited 5.2 165,000 120,000 11,000 166,000 130,000 50,550,500 12.25

Oil and Gas Development Company Limited 70,000 280,000 - 350,000 - - -

73,265,530 17.75

Construction and Materials

Lucky Cement Limited - 250,000 - 250,000 - - -

D. G Khan Cement Company Limited 5.2 500,000 650,000 - 425,000 725,000 63,771,000 15.45

Fauji Cement Company Limited - 1,500,000 - 1,500,000 - - -

Maple Leaf Cement Factory Limited - 1,200,000 - - 1,200,000 36,060,000 8.74

Cherat Cement Company Limited 550,000 460,000 - 1,010,000 - - -

Kohat Cement Company Limited 425,000 475,000 - 625,000 275,000 35,150,500 8.52

134,981,500 32.71Fixed Line Telecommunications

Pakistan Telecommunications Limited 1,100,000 2,650,000 - 1,850,000 1,900,000 48,393,000 11.72

Number of shares


JS Islamic Fund

Auto Mobile and Parts

Pak Suzuki Motors Company Limited 300,000 51,000 - 212,000 139,000 38,070,710 9.22

Indus Motors Company Limited 21,300 69,700 - 22,100 68,900 37,062,688 8.98

75,133,398 18.20

Personal Goods (Textile)

Nishat Mills Limited 5.2 500,000 425,000 - 500,000 425,000 47,566,000 11.52

Banks

Meezan Bank Limited - 951,000 - 951,000 - - -

General Industrials

Packages Limited 185,000 69,900 - 254,900 - - -

Cherat Packaging Limited - 450,000 - - 450,000 33,412,500 8.1033,412,500 8.10

Held for trading investments as at 30 June 2014 Rupees 412,751,928 100.00

Cost of held for trading investments as at 30 June 2014 Rupees 353,653,595


JS Islamic Fund

8. PAYABLE TO THE MANAGEMENT COMPANY

Under the provision of the Non-Banking Finance Companies and Notified Entities Regulations 2008, the ManagementCompany is entitled to a remuneration for services rendered to the Fund up to a maximum of 3% per annum based onthe average monthly net assets of the Fund during the first five years of Fund's existence, and thereafter, of an amountequal to 2% of such assets of the Fund. Management Company charged remuneration at the rate of 2% per annum basedon the daily net assets of the Fund during the year ended 30 June 2014.

8.1 This includes amount payable as of 30 June 2014 against sales load amounting to Rs. 6,095 (2013: Nil) and otherexpenses amounting to Rs. 17,251 (2013: Rs. 6,250).

9. REMUNERATION TO THE TRUSTEE

Central Depository Company of Pakistan Limited (the Trustee) is entitled to a monthly remuneration for servicesrendered to the Fund under the provisions of the trust deed as follows:

- up to rupees one billion Rs. 700,000 or 0.2% per annum of the daily net assets, whichever is higher.

6. DIVIDEND AND OTHER RECEIVABLES 2014 2013

Dividend receivable - 35,000Advance tax 6,597 6,597Return receivable on bank balances 248,286 198,147

Rupees 254,883 239,744

7. SECURITY DEPOSITS

National Clearing Company of Pakistan Limited 2,500,000 2,500,000Central Depository Company of Pakistan Limited 100,000 100,000

Rupees 2,600,000 2,600,000

Balance as of 1 July 613,483 398,074Remuneration for the year 7,405,339 6,451,157Sales load and other expenses incurred 157,103 67,200Payments during the year (8,055,122) (6,302,948)Balance as of 30 June Rupees 120,803 613,483

- exceeding rupees one billion- exceeding rupees one billion Rs. 2,000,000 plus 0.1% per annum of the daily net assets of the

Balance as of 1 July 60,723 57,377Remuneration for the year 754,943 703,923Paid during the year (744,692) (700,577)Balance as of 30 June Rupees 70,974 60,723

Rs. 2,000,000 plus 0.1% per annum of the daily net assets of the Fund exceedingrupees one billion.

5.2 Following shares have been pledged with National Clearing Company of Pakistan Limited:

2014 2013 2014 2013

Pakistan State Oil Company Limited 75,000 115,000 29,163,750 36,843,700

Nishat Mills Limited 30,000 30,000 3,357,600 2,826,300

D. G Khan Cement Company Limited 170,000 - 14,953,200 -

275,000 145,000 47,474,550 39,670,000

(Number of Shares) (Rupees)

11.1 The Finance Act 2008 introduced an amendment to the Workers' Welfare Fund Ordinance, 1971 (WWF Ordinance). As aresult of this amendment it may be construed 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 rendering themliable to pay contribution to WWF at the rate of two percent of their accounting or taxable income, whichever is higher.In this regard, a constitutional petition has been filed by certain CISs through their trustees in the Honourable High Courtof Sindh (the Court), challenging the applicability of WWF to the CISs, which is pending for adjudication.

During the year 2011, a single bench of the Lahore High Court (LHC) in a constitutional petition relating to the amendmentsbrought in the WWF Ordinance, 1971 through the Finance Act, 2006, and the Finance Act 2008, had declared the saidamendments as unlawful and unconstitutional and struck them down. However, in the month of March 2013, a largerbench of the Sindh High Court (SHC) in various constitutional petitions declared that amendments brought in the WWFOrdinance, 1971 through the Finance Act, 2006, and the Finance Act 2008, do not suffer from any constitutional or legalinfirmity and overruled a single-member LHC bench judgement issued in August 2011. However, the Honourable PeshawarHigh Court on 29 May 2014 on a petition filed by certain aggrieved parties (other than mutual funds) have adjudicatedthat the amendments introduced in the Workers Welfare Fund Ordinance, 1971 through the Finance Act of 1996 and2009 lacks the essential mandate to be introduced and passed through the money bill under the Constitution of Pakistanand hence have been declared as ultra vires the Constitution.

However, as per the advice of legal counsel of Mutual Fund Association of Pakistan (MUFAP), the stay granted to CIS (asmentioned in the first paragraph) remains intact and the constitution petitions filed by the CIS to challenge the WorkersWelfare Fund contribution have not been affected by the SHC judgment.

As the matter relating to levy of WWF is currently pending in the Court, the Management Company, as a matter ofprudence and abundant caution, has decided to maintain the provision of entire liability of Rs. 9.88 million (2013: Rs.7.35 million) in these financial statements.


JS Islamic Fund

10. ANNUAL FEE TO SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

This represents annual fee payable to SECP in accordance with the NBFC Regulations, whereby the Fund is required topay SECP an amount at the rate of 0.095% per annum of the average daily net assets of the Fund in accordance with theregulation 62 of the NBFC Regulation 2008.

11. ACCRUED AND OTHER LIABILITIES 2014 2013

Provision for Workers' Welfare Fund 11.1 9,884,205 7,351,234Payable against purchase of investments - 2,222,992Brokerage fee payable 182,937 165,114Auditors' remuneration 401,800 333,900Zakat payable 34,057 33,518Unclaimed dividend 11,533 11,533Haram income payable to charitable trust 11.2 333,451 108,276Sindh sales tax payable on Management Company's remuneration 169,921 106,435Federal excise duty payable on Management Company's remuneration 11.3 964,550 57,985Payable against rating fee - 100,000Other payables 277,801 953,860

Rupees 12,260,255 11,444,847

11.2 Haram income payable to the Charitable Institutions 2014 2013

Balance as at 1 July 108,276 119,167Haram income for the year 16 325,175 358,236Paid during the year

- Sind Institute of Urology and Transplantation 20,000 73,823- Friends of Burns Centre 20,000 73,823- Al-Shifa Trust Eye Hospital 20,000 73,823- Shaukat Khanum Memorial Cancer Hospital & Research Centre 20,000 23,833- Cancer Care Hospital - 50,000- The Kidney Centre 20,000 73,825

100,000 369,127100,000 369,127Balance as at 30 June Rupees 333,451 108,276

11.3 As per the requirement of the Finance Act, 2013, the Federal Excise Duty (FED) at the rate of 16% on the remunerationof the Management Company has been applied effective from 13 June 2013. The Management Company is of the viewthat since the remuneration is already subject to the provincial sales tax, further levy of FED may result in double taxation,which doesn't appear to be the spirit of the law. A stay order against the collection have been granted by the HonourableHigh Court of Sindh on a petition filed by the Mutual Funds Association of Pakistan (MUFAP). As a matter of abundantcaution, the Management Company has made provision for FED from the aforementioned effective date of which FEDup to the month of August 2013 was paid by the Fund to the regulatory authority and thereafter the FED amount hasnot been paid.

12. CONTINGENCY AND COMMITMENT

There are no contingencies and commitments at the year end.

13. NUMBER OF UNITS IN ISSUE

As at 30 June 2014, 6,446,853 (2013: 4,985,682) units at par value of Rs. 100 each were in issue.

2014 2013

Total outstanding as of 1 July 4,985,682 5,139,943Issued during the year 3,787,965 1,533,507Bonus units issued during the year 2,093,927 -Redemptions during the year (4,420,721) (1,687,768)Total units in issue as of 30 June Number 6,446,853 4,985,682

14. AUDITORS' REMUNERATION

Annual audit fee 200,000 200,000Fee for the review of half yearly financial statements 110,000 110,000Fee for the review of statement of compliance with the

best practices of Code of Corporate Governance 40,000 40,000Other certifications, etc. 75,000 75,000Out of pocket expenses 70,000 32,510

Rupees 495,000 457,510

15. TAXATION

The Fund's income is exempt from Income Tax as per clause 99 of Part I of the Second Schedule to the Income TaxOrdinance, 2001 subject to the condition that not less than 90% of the accounting income for the year as reduced bycapital gains whether realised or unrealised is distributed amongst the unit holders. Furthermore, as per regulation 63


JS Islamic Fund

17.1 Detail of balances with related parties / connected 2014 2013 persons as at year end

JS Investments LimitedRemuneration payable to the Management Company 8 Rupees 97,457 607,233Sindh sales tax payable on Management Company's remuneration * 11 Rupees 169,921 106,435Federal excise duty payable on Management Company's remuneration * 11 Rupees 964,550 57,985Sales load payable Rupees 6,095 -Expenses payable Rupees 17,251 6,250

Central Depository Company of Pakistan LimitedRemuneration payable to the Trustee 9 Rupees 70,974 60,723Settlement charges payable Rupees 4,498 4,500Security deposit Rupees 100,000 100,000

* Paid / payable to the Management Company for onwards payment to the Government.


JS Islamic Fund

2014 2013JS Fund of FundsUnits outstanding: 360,360 (2013: Nil) Rupees 24,983,784 -

EFU Life Assurance LimitedUnits outstanding: 1,795,680 (2013: 1,377,750) Rupees 124,494,420 100,162,427

JS Bank LimitedBank balance Rupees 1,051,836 721,339

of the Non-Banking Finance Companies and Notified Entities Regulations, 2008, the Fund is required to distribute 90%of the net accounting income other than unrealised capital gains to the unit holders. The Fund is also exempt from theprovisions of Section 113 (minimum tax) under Clause 11A of Part IV of the Second Schedule to the Income Tax Ordinance,2001. Since the management has distributed the income earned by the Fund during the year to the unit holders in themanner as explained above, no provision for taxation has been made in these financial statements.

16. DIVIDEND INCOME (HELD FOR TRADING) - Non shariah compliant income deducted from dividend income

According to the instructions of the Shariah Supervisory Council, if any income is earned by the Fund from the investmentswhereby a portion of income of such investees has been derived from prohibited sources, such proportion of incomeof the Fund should be donated to charitable purposes.

During the current year the Non Shariah Compliant income amounting to Rs. 325,175 (2013: Rs. 358,236) was deductedfrom the dividend income of the Fund (a portion of dividend income, rest of which is considered as halal). This was / willbe distributed for charity with the approval of Shariah Supervisory Council.

17. TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS

Connected persons / related parties include JS Investment Limited (JSIL) being the Management Company, CentralDepository Company of Pakistan Limited being the trustee, Jahangir Siddiqui and Company Limited being the holdingcompany of JS Bank Limited (JSBL - which is the holding Company of the Management Company), JS Global CapitalLimited (which is a fellow subsidiary of JSBL) and other associated companies of the Management Company and itssubsidiary, Key Management Personnel and other funds being managed by the Management Company and includesentities holding 10% or more in the units of the Fund as at 30 June 2014. It also includes staff retirement benefit fundsof the above related parties / connected persons.

2014 2013EFU Life Assurance LimitedIssue of units - 1,481,560 (2013: Nil) Rupees 106,884,915 -Redemption of units - 1,650,122 (2013: Nil) Rupees 103,314,161 -Bonus units - 586,492 (2013: Nil) Rupees 38,015,615 -


JS Islamic Fund

17.2 Detail of transactions with related parties / connected persons during the year

JS Investments LimitedRemuneration of the Management Company 8 Rupees 7,405,339 6,451,157Sindh sales tax on Management Company's

remuneration ** Rupees 1,374,431 1,041,465Federal Excise Duty on Management

Company's remuneration ** Rupees 1,184,854 57,985Sales load Rupees 77,353 5,839Expenses incurred Rupees 79,750 61,361

Central Depository Company of Pakistan LimitedRemuneration to the Trustee 9 Rupees 754,943 703,923Settlement charges Rupees 64,632 41,623

JS Fund of FundsIssue of units - 468,988 (2013: 466,278) Rupees 30,000,000 25,374,276Redemption of units - 171,666 (2013: 466,278) Rupees 12,500,000 26,035,983Bonus units - 63,038 (2013: Nil) Rupees 4,311,173 -

JS Bank LimitedIssue of units - Nil (2013: 539,665) Rupees - 30,000,000Redemption of units - Nil (2013: 539,665) Rupees - 33,729,088

Bank Charges Rupees 5,275 2,282

JS Global Capital LimitedBrokerage expenses 17.2.1 Rupees 236,206 165,245** Paid / payable to the Management Company for onwards payment to the Government.

Key Management Personnel of the Management CompanyUnits outstanding: 71,830 (2013: Nil) Rupees 4,979,984 -

JS Global Capital LimitedBrokerage fee payable Rupees - 5,000

ABAMCO Limited Staff Provident FundUnits outstanding: 37,701 (2013: Nil) Rupees 2,613,827 -

Entity holding 10% or more than 10% of units of the Fund

Units outstanding: 880,010 (2013: Nil) Rupees 61,011,067 -

Fund's investments in related parties are disclosed in note 5.

17.2.1 The amount of brokerage expense represents the amount of expense incurred and not the purchase or sale value ofsecurities transacted through them.

17.3 Remuneration payable to the Management Company and the Trustee has been determined in accordance with theprovisions of NBFC Regulations and the Trust Deed respectively.

17.4 Purchase and redemption of the Fund's unit by related parties / connected persons are recorded at the applicable netasset value per unit. Dividend income are recorded at the rates and amount declared by the investee entities. Othertransactions are at agreed rates.

18. FINANCIAL RISK MANAGEMENT

Introduction and overview

The Fund has exposure to the following risks from financial instruments:

- credit risk- liquidity risk- market risk- operational risk

This note presents information about the Fund’s exposure to each of the above risks, the Fund’s objectives, policies andprocesses for measuring and managing risk, and the Fund’s management of capital.

Risk management framework

The Funds activities exposes it to varying degrees of risk.

Risk is inherent in the Fund's activities, but it is managed through monitoring and controlling activities which are primarilyset up to be performed based on limits established by the management company, Fund's constitutive documents andthe regulations and directives of the SECP.

Asset purchases and sales are determined by the Fund’s Investment Manager, who has been authorised to manage thedistribution of the assets to achieve the Fund’s investment objectives. Compliance with the target asset allocations andthe composition of the portfolio is monitored by the Investment Committee. In instances where the portfolio has divergedfrom target asset allocations, the Fund’s Investment Manager is obliged to take actions to rebalance the portfolio in linewith the established targets, within prescribed time limits.

18.1 Credit risk

Credit risk is the risk of financial loss to the Fund if a counterparty to a financial instrument fails to meet its contractualobligation. In the Fund's case, it arises principally from bank balances and security deposit.


JS Islamic Fund

ABAMCO Ltd. Staff Provident FundIssue of units - 102,596 (2013: Nil) Rupees 7,500,000 -Redemption of units - 71,490 (2013: Nil) Rupees 4,406,634 -Bonus units - 6,595 (2013: Nil) Rupees 451,039 -

Key Management Personnel of the Management CompanyIssue of units 138,507 (2013: 6,300) Rupees 10,224,445 350,000Redemption of units - 79,242 (2013: 14,913) Rupees 6,042,586 903,710Bonus units - 12,565 (2013: Nil) Rupees 859,340 -

Entity holding 10% or more than 10% of units of the Fund

Issue of units - 726,069 (2013: Nil) Rupees 50,000,000 -Bonus units - 153,941 (2013: Nil) Rupees 10,528,000 -


JS Islamic Fund

Exposure to credit risk

In summary, compared to the maximum amount included in Statement of Assets and Liabilities, the maximum exposureto credit risk as at 30 June 2014 was as follows:

Difference in the balance as per the Statement of Assets and Liabilities and maximum exposure in investments is due to thefact that investment in equity securities of Rs. 412,751,928 (2013:361,382,910) is not exposed to credit risk.

Credit ratings

Details of the credit ratings of the balances with banks as at 30 June 2014 are as follows:

Bank balances (including profit due) 44,515,155 44,515,155 12,021,000 12,021,000

Investments - held for trading 412,751,928 - 361,382,910 -

Dividend receivable - - 35,000 35,000

Security deposits 2,600,000 2,600,000 2,600,000 2,600,000

Rupees 459,867,083 47,115,155 376,038,910 14,656,000

2014 2013

Balance as per theStatement of Asset

and Liabilities

MaximumExposure

Balance as per theStatement of Asset

and Liabilities

MaximumExposure

2014 2013 2014 2013Rating

A1 1,051,836 721,194 2.36 6.10A1+ 43,463,319 11,299,806 97.64 93.90

44,515,155 12,021,000 100.00 100.00

(Rupees) (%)

Above rates are on the basis of available ratings assigned by PACRA and JCR-VIS (as of 30 June 2014).

Concentration of credit risk

Concentration of credit risk exists when changes in economic or industry factors affect the group of counterpartieswhose aggregate credit exposure is significant in relation to the Fund’s total credit exposure. The Fund’s portfolio offinancial assets is broadly diversified and transactions are entered into with diverse credit worthy counterparties therebymitigating any significant concentration of credit risk industrial distribution.

Management of credit risk

The Fund's policy is to enter into financial contracts in accordance with the investment guidelines approved by theInvestment Committee, its Trust Deed and the requirements of NBFC rules and regulations. Before making investmentdecisions, the credit rating and credit worthiness of the issuer is taken into account along with the financial backgroundso as to minimise the risk of default.

Credit risk is managed and controlled by the management company of the Fund in the following manner:

- Where the investment committee makes an investment decision, the credit rating and credit worthiness of the issueris taken into account along with the financial background so as to minimise the risk of default.

- Analysing of credit ratings and obtaining adequate collaterals wherever appropriate / relevant.

- The risk of counterparty exposure due to failed trades causing a loss to the Fund is mitigated by a periodic review ofthe credit ratings and financial statements on a regular basis.

- Cash is held only with reputable banks with high quality external credit enhancements.

- Investment transactions are carried out with a large number of brokers, whose credit worthiness is taken into accountso as to minimise the risk of default and transactions are settled or paid for only upon delivery.

(Rupees) (%) (Rupees) (%)

Commercial banks (including profit due) 44,515,155 94.48 12,021,000 82.02National Clearing company of

Pakistan Limited 2,500,000 5.31 2,500,000 17.06Central Depository Company of

Pakistan Limited 100,000 0.21 100,000 0.68Oil and Gas - 0.00 35,000 0.24

47,115,155 100 14,656,000 100

2014 2013

Past due and impaired assets and collaterals held

None of the financial assets of the Fund are past due or impaired as at 30 June 2014. All the financial assets of the Fundas at 30 June 2014 are unsecured.

Settlement risk

The Fund’s activities may give rise to risk at the time of settlement of transactions. Settlement risk is the risk of loss dueto the failure of an entity to honour its obligations to deliver cash, securities or other assets as contractually agreed onsale.

For the vast majority of transactions the Fund mitigates this risk by conducting settlements through a broker to ensurethat a trade is settled only when both parties have fulfilled their contractual settlement obligations.

18.2 Liquidity risk

Liquidity risk is the risk that the Fund will encounter difficulty in meeting obligations arising from its financial liabilitiesthat are settled by delivering cash or another financial asset, or that such obligations will have to be settled in a mannerdisadvantageous to the Fund.

The Fund is exposed to cash redemptions of its units on a regular basis. Units are redeemable at the holder’s optionbased on the Fund’s net asset value per unit at the time of redemption calculated in accordance with the Fund’sconstitutive document and guidelines laid down by Securities and Exchange Commission of Pakistan (SECP).

Management of liquidity risk

The Fund's policy is to manage this risk by investing majority of its assets in investments that are traded in an activemarket and can be readily disposed. The Fund invests primarily in marketable securities and other financial instruments,which under normal market conditions are readily convertible to cash. As a result, the Fund may be able to liquidatequickly its investments in these instruments at an amount close to their fair value to meet its liquidity requirement. Thepresent settlement system is a T+2 system, which means that proceeds from sales (to pay off redemptions) of holdingswill be received on the second day after the sale, while redemptions have to be paid within a period of six working daysfrom the date of the redemption request.

The Fund has the ability to borrow, with prior approval of trustee, for meeting redemption. No such borrowings weremade during the year. The maximum amount available to the Fund from borrowings is limited to the extent of 15% ofnet assets at the time of borrowing with repayment within 90 days of such borrowings.

In order to manage the Fund's overall liquidity, the Fund can also withhold daily redemption request in excess of tenpercent of the units in issue and such requests would be treated as redemption request qualifying for being processedon the next business day. Such procedure would continue until the outstanding redemption requests come down to alevel below ten percent of the units then in issue.


JS Islamic Fund

Details of Fund's concentration of credit risk of financial instruments by industrial distribution are as follows:


JS Islamic Fund

Maturity analysis for financial liabilities

The table below analysis the Fund's financial liabilities into relevant maturity groupings based on the remaining periodat the balance sheet date to the contractual maturity date and represents the undiscounted cash flows.

18.3 Market risks

Market risk is the risk that changes in market prices, such as markup rates, equity prices, foreign exchange rates andcredit spreads (not relating to changes in the obligor’s/issuer’s credit standing) will affect the Fund’s income or the valueof its holdings of financial instruments. The objective of market risk management is to manage and control market riskexposures within acceptable parameters, while optimising the return on risk.

Management of market risks

The Management Company manages market risk by monitoring exposure on marketable securities by following theinternal risk management policies and investment guidelines approved by the Investment Committee and regulationslaid down by the Securities and Exchange Commission of Pakistan. The maximum risk resulting from financial instrumentsequals their fair values.

The Fund is exposed to markup rate risk and equity price risk.

Carrying Less than Within 330 June 2014 amount 1 month months

Non-derivative liabilities (at amortised cost)

Payable to the Management Company

(excluding Sindh sales tax and federal excise duty) 120,803 120,803 -

Remuneration payable to the Trustee 70,974 70,974 -

Annual fee payable to the Securities

and Exchange Commission of Pakistan 351,754 - 351,754

Accrued expenses and other liabilities 1,241,579 1,241,579 -

Payable against redemption of units 100,922 100,922 -

Rupees 1,886,032 1,534,278 351,754

Unit holders' fund Rupees 446,968,972 446,968,972 -

Carrying Less than Within 330 June 2013 amount 1 month months

Non-derivative liabilities (at amortised cost)

Payable to the Management Company

(excluding Sindh sales tax and federal excise duty) 607,233 607,233 -

Remuneration payable to the Trustee 60,723 60,723 -

Annual fee payable to the Securities

and Exchange Commission of Pakistan 306,428 - 306,428

Accrued expenses and other liabilities 3,929,193 3,929,193 -

Payable against redemption of units 1,153,874 1,153,874 -

Rupees 6,057,451 5,751,023 306,428

Unit holders' fund Rupees 362,466,152 362,466,152 -

Above financial liabilities do not carry any mark-up.


JS Islamic Fund

18.3.1 Markup rate risk

Markup rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market markup rates. Risk management procedures are the same as those mentioned in the credit riskmanagement.

At 30 June 2014, details of the markup rate profile of the Fund's markup bearing financial instruments were as follows:

2014 2013Variable rate instruments

Financial assets (Bank balances) Rupees 42,795,366 10,871,848

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in markup rates at the year end, unit holder fund would have increased / (decreased) byRs. 427,954. The analysis assumes that all other variables remain constant.

The above variable rate financial instruments represent PLS account bank balances and carry profit rates ranging between5.5% to 8.65% per annum. These are withdrawable on demand.

None of the Fund's liability is subject to markup rate risk.

18.3.2 Equity price risk

Equity price risk is the risk of unfavourable changes in the fair value of equity securities as a result of changes in thelevels of KSE-Index and the value of individual shares. The equity price risk exposure arises from the Fund's investmentsin equity securities for which prices in the future are uncertain. The Fund policy is to manage price risk throughdiversification and selection of securities within specified limits set by internal risk management guidelines or therequirements of NBFC regulations.

The Fund manages those risk by limiting exposure to any single investee company to the extent of 15% of issued capitalof that investee company and the net assets of the Fund with overall limit of 35% to a single industry sector of the netassets of the Fund (the limit set by NBFC regulations). The Fund also manages its exposure to price risk by reviewingportfolio allocation as frequently as necessary and at least once a quarter from the aspect of allocation within industryand individual stock within that allocation.

Details of the Fund's investment in industrial / economic sector are given in note 5.1.

The following table illustrates the sensitivity of the income for the year and the unit holders' fund to an increase ordecrease of 5% in the fair values of the Fund’s equity securities. This level of change is considered to be reasonablypossible based on observation of current market conditions. The sensitivity analysis is based on the Funds' equitysecurities at each Statement of Assets and Liabilities date, with all other variables held constant.

2014 2013

Income statement Rupees 20,637,596 18,069,146

Unit holders' fund Rupees 20,637,596 18,069,146

18.4 Operational risks

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes,technology and infrastructure supporting the Fund’s operations either internally within the Fund or externally at theFund’s service providers, and from external factors other than credit, market and liquidity risks such as those arising fromlegal and regulatory requirements and generally accepted standards of investment management behaviour. Operational

risks arise from all of the Fund’s activities.

The Fund’s objective is to manage operational risk so as to balance limiting of financial losses and damage to its reputationwith achieving its investment objective of generating returns for investors.

The primary responsibility for the development and implementation of controls over operational risk rests with theboard of directors. This responsibility encompasses the controls in the following areas:

- requirements for appropriate segregation of duties between various functions, roles and responsibilities.

- requirements for the reconciliation and monitoring of transactions;

- compliance with regulatory and other legal requirements;

- documentation of controls and procedures;

- requirements for the periodic assessment of operational risks faced, and the adequacy of controls and proceduresto address the risks identified;

- ethical and business standards;

- risk mitigation, including insurance where this is effective.

18.5 Unit holder's fund risk management

Management's objective when managing unit holders' funds is to safeguard the Fund's ability to continue as a goingconcern so that it can continue to provide returns to its unit holders' and to maintain a strong base of assets undermanagement.

The Fund manages its investment portfolio and other assets by monitoring return on net assets and makes adjustmentsto it in the light of changes in markets' conditions. Under the NBFC regulations 2008, the minimum size of an open endscheme shall be one hundred million rupees at all the times during the life of the scheme. The Fund size depends onthe issuance and redemption of units.

18.6 Fair value of financial instruments

The Fund’s accounting policy on fair value measurements is discussed in note 3.1.

The Fund measures fair values using the following fair value hierarchy that reflects the significance of the inputs usedin making the measurements:

Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.

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

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

As at 30 June 2014, all the investments were categorised in level 1.


JS Islamic Fund


JS Islamic Fund

19. SUPPLEMENTARY NON FINANCIAL INFORMATION

The information regarding unit holding pattern, top brokers, members of the Investment Committee, fund manager,meetings of the Board of Directors of the management company, meetings of Audit Committee of the managementcompany, meetings of the Human Resource and Remuneration Committee of the management company and rating ofthe Fund and the management company has been disclosed in Annexure - 1 to the financial statements.

20. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue by Board of Directors of management company on August 15, 2014.




ANNEXURE-1Supplementary Non Financial InformationAs Required Under Section 6(D), (F), (G), (H), (I) and (J)of the Fifth Schedule to the NBFC Regulations

(i) UNIT HOLDING PATTERN OF FUND

CategoryNo. of unit

holdersNumber ofunits held

% of total units

Individuals 426 2,205,991 34.22Associated Companies / Directors 2 2,156,039 33.44Insurance Companies - - -Banks / Development Financial Institution - - -Non Banking Financial Companies 1 353,586 5.48Retirement Funds 15 792,677 12.30Public Limited Companies - - -Others 6 938,559 14.56

450 6,446,853 100

CategoryNo. of unit

holdersNumber ofunits held

% of total units

Individuals 414 1,695,950 34.02Associated Companies / Directors 1 1,377,750 27.63Insurance Companies - - -Banks / Development Financial Institution - - -Non Banking Financial Companies - - -Retirement Funds 19 1,871,647 37.54Public Limited Companies - - -Others 5 40,334 0.81

439 4,985,682 100

2014

2013


JS Islamic Fund

(ii) LIST OF TOP BROKERS BY PERCENT OF THE COMMISSION PAID

2014

Name of brokerPercentage ofcommission /Brokerage(%)

JS Global Capital Limited 14.87Elixir Securities Pakistan (Pvt) Limited 8.71Habib Metropolitan Financial Services Limited 7.10KASB Securities Limited 6.72Invest & Finance Securities Limited 6.58MRA Securities (Pvt) Limited 4.66Escorts Capital Limited 4.64Topline Securities (Pvt) Limited 4.57IGI Finex Securities Limited 4.43Shajar Capital Pakistan (Pvt) Limited 4.15

2013

Name of brokerPercentage ofcommission /Brokerage(%)

JS Global Capital Limited 12.98KASB Securities Limited 8.41Invest and Finance Securities Limited 6.79MRA Securities (Pvt.) Limited 5.78AL Habib Capital Market (Pvt.) Limited 5.60Topline Securities (Pvt) Limited 4.96Taurus Securities Limited 4.95Optimus Capital Markets (Pvt) Limited 4.81Shajar Capital Pakistan (Private) Limited 4.47Fortune Securities Limited 4.41


JS Islamic Fund

(iii) THE MEMBERS OF THE INVESTMENT COMMITTEE

Following are the members of Investment Committee of the Fund:

Dr. Ali Akhtar Ali - Chief Executive OfficerMuhammad Khawar Iqbal - Chief Financial OfficerMr. Assad Hameed Khan - Country Head Business DevelopmentMr. Arsalan Asif Soomro - Fund ManagerMr. Suleman Rafiq Maniya - Head of Research

DR. ALI AKHTAR ALI - CHIEF EXECUTIVE OFFICER

Dr. Ali is currently serving as the Chief Executive Officer at JS Investments Limited. He has over 13 years of active experiencein both Fixed Income and Equity markets of Pakistan. He earned his MBBS from Baqai Medical College and MBA withmajors in Finance from PAF-KIET. Prior to becoming Chief Executive Officer, Dr Ali was serving in JS Investments as ChiefInvestment Officer for about 3 years. He joined JS Investments as Senior Vice President in Investments. Before joiningJS Investments Limited he remained associated with KASB Capital Ltd. for 2 years as Chief Dealer in the TreasuryDepartment. He was then deputed as the Head of Money Market, Forex and Financial Advisory at KASB Securities. Priorto KASB Capital he worked with JS Investments Limited from 2006 till 2008 in the capacity of Assistant Vice President,Investments Department. He also worked two and a half years (2004-2006) at Jahangir Siddiqui Capital Markets as SeniorDealer Fixed Income Desk and was later promoted to the position of Head of Fixed Income. He also served 3 years (2000-2004) at BMA Capital Management as a Senior Dealer on the Fixed Income Desk.

MUHAMMAD KHAWAR IQBAL, CFO & COMPANY SECRETARY

Mr. Muhammad Khawar Iqbal joined JS Investments Limited in May 2005. In March 2012, he was promoted as CompanySecretary and Chief Financial Officer. Previously he was managing financial reporting and fund accounting matters ofvarious funds under management. He has contributed a lot towards automation of Fund Accounting Management andhas been key resource in designing and implementing Fund Accounting Management module in ERP system.

Prior to joining JSIL, he has a rich and diversified experience of managing financial accounting of twenty six closed endfunds under management of Investment Corporation of Pakistan. ICP was established by the Government of Pakistanwith objectives to encourage and broaden the base of investments, development of capital market and to promoteindustrial development in the country. Where, Mr. Khawar had also contributed significantly in the development andimplementation of an investment scheme.

Mr. Khawar holds masters degrees in Business Administration and Economics

MR. ASSAD HAMEED KHAN – COUNTRY HEAD OF BUSINESS DEVELOPMENT

Mr. Assad Khan joined JSIL in January 2007 as part of the Business Planning and Development team leading ProductDevelopment activities. In July 2008 he was also entrusted with the responsibility of all aspects of JSIL's internationalbusiness endeavours as Head of Products and International Business Development. Since February 2011 he has beenentrusted with the responsibility to also lead the marketing and sales initiatives of JSIL as the Head of Strategy & BusinessDevelopment Department. Prior to joining JSIL, he has over four years of diversified experience with the Securities andExchange Commission of Pakistan (SECP) in various capacities including authorization, supervision, enforcement, researchand policy setting for Non-Banking Financial sector - driving key policy initiatives including REITs and Private Equity.

Prior to the SECP, he worked at A. F. Ferguson & Co., Chartered Accountants Pakistan for five years in Business Assuranceand Advisory, specializing in audit and management consultancy. He is a CA Finalist from the Institute of CharteredAccountants of Pakistan.


JS Islamic Fund

MR. ARSALAN ASIF SOOMRO - FUND MANAGER

Mr. Arslan Asif H. Soomro graduated from world-renowned Cass Business School, London in May 2008 with First ClassHonours in B.Sc. (Honors) in Investment and Financial Risk Management. Mr. Soomro joined JS Investments Limited asa Research Analyst in Sep 2009 and was subsequently promoted as a Fund Manager in April 2010. Mr Soomro haspreviously managed JS KSE - 30 Fund, JS Principal Secure Fund II and JS Islamic Pension Savings Fund. Currently, hemanages JS Large Cap Fund, JS Fund of Funds and the flagship JS Islamic Fund (one of the highest yielding Fund inPakistan in recent years). Mr Soomro holds a diverse set of professional qualifications, such as, FSA UK approved InvestmentManagement Certificate (IMC), Financial Risk Manager (FRM) and is fulfilling the requirement of required work experienceafter successfully completing all levels of Chartered Financial Analyst (CFA) designation.

MR. SULEMAN RAFIQ MANIYA – HEAD OF RESEARCH

"Mr. Suleman Rafiq Maniya has over two years of experience in the field of research and Product Development. He joinedJSIL in February 2014 as the Head of Research. Prior to joining JSIL, he has worked at Al Meezan Investments as ManagerEquity Research and Product Department. He had six month’s association with Elixir Securities (A Dawood GroupCompany) as a Research Analyst. He also worked as an Analyst Equity Research at IGI Financial Services. He holds a Masterof Science degree with majors in Finance from School of Business, Economics and Law; University of Gothenburg , Swedenin May 2010.

(iv) MANAGER OF THE FUND

MR. ARSALAN ASIF SOOMROPlease see his profile above.


JS Islamic Fund

(v) MEETINGS OF BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY

Mr. Nazar Mohammad Shaikh

Mr. Mazharulhaq Siddiqui

Mr. Suleman LalaniMr. Rashid Mansur

Mr. Munawar Alam Siddiqui

Lt. Gen (Retd.) Masood Parwaiz

Mr. Ahsen Ahmed

Mr. Asif Reza Sana

Mr. Kamran Jafar

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

Name of Directors

Mr. Kamran JafarMr. Muhammad Khalil Ur Rehman

Mr. Muhammad Raza Dyer

Mr. Ali Akhtar Ali

(vi) MEETINGS OF AUDIT COMMITTEE

Meetingsattended

15 Aug2013

24 Oct2013

22 Feb2014

22 April2014

Mr. Nazar Mohammad Shaikh 2 1 1 N/ A N/ A

Mr. Munawar Alam Siddiqui 2 1 1 N/ A N/ A

Lt. Gen (Retd.) Masood Parwaiz - - - N/ A N/ A

Mr. Asif Reza Sana 2 N/ A N/ A 1 1

Mr. Suleman Lalani 2 N/ A N/ A 1 1

Meetings held on

Name of Directors

Mr. Suleman Lalani 2 N/ A N/ A 1 1

Mr. Muhammad Khalil ur Rehman 2 N/ A N/ A 1 1

2 2 3 3

Meetingsattended

08 July2013

16 Aug2013

19 Sep2013

25 Oct2013

18 Nov2013

31 Dec2013

21 Feb2014

11 Mar2014

22 Apr2014

26 June2014

9 1 1 1 1 - 1 1 1 1 15 1 1 1 1 1 N/A - - - -

9 1 1 1 1 1 1 1 - 1 1

7 1 1 1 1 1 1 - 1 - -

5 1 1 1 1 1 N/A - - - -

1 - - - - 1 N/A - - - -

6 1 1 1 - 1 - - 1 1 -

3 N/A N/A N/A N/A N/A 1 1 - 1 -

5 N/A N/A N/A N/A N/A 1 1 1 1 1

Meetings held on

5 N/A N/A N/A N/A N/A 1 1 1 1 1

5 N/A N/A N/A N/A N/A 1 1 1 1 1

5 N/A N/A N/A N/A N/A 1 1 1 1 1

2 - - - - - - N/A N/A 1 1

6 6 6 5 6 7 6 6 8 6


JS Islamic Fund

(vii) MEETINGS OF HUMAN RESOURCE AND REMUNERATION COMMITTEE

Meetingattended

20 Feb2014

03 June2014

18 June2014

Mr. Rashid Mansur 1 1 - -

Mr. Nazar Mohammad Shaikh 3 1 1 1

Mr. Kamran Jafar 3 1 1 1

Mr. Ali Akhtar Ali 2 - 1 1

3 3 3

(viii)Fund And Asset Manager Rating

Name of Members

Meeting held on

The Pakistan Credit Rating Agency (PACRA) assigned the star ranking of 3 Star (Short Term) and 2 Star (Long Term) to thefund through a press release dated November 18, 2013.

JCR-VIS Credit Rating Company Limited has reaffirmed Management Quality Rating of “AM2-“(AM-Two Minus) toJS Investments Limited through a press release dated August 20, 2014. The rating denotes high management quality of theManagement Company.


JS Islamic Fund

Note:Please refer to point no. 4 of statement of compliance with the Code of Corporat Goverance on page no. 12 for N/A.

Documents

JS Islamic Fund - JS Investments Limited (JSIL)jsil.com/downloads/reports/2014/AR_ISF.pdf1st Floor Shaikh Sultan Trust Building # 2 Beaumont Road, Karachi - 75530, Pakistan Legal Advisers