Pakistan: NAFA Islamic Energy Fund Quarterly Report - 31 March 2017

Transcription

2. NAFA ISLAMIC ENERGY FUND MISSION STATEMENT To rank in the top quartile in performance of NAFA FUNDS relative to the competition , and to consistently offer Superior risk-adjusted returns to investors. Quarterly Report Page 01
3. Contents NAFA ISLAMIC ENERGY FUND Page 02 FUND 'S INFORMATION 03 DIRECTORS' REPORT 05 CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES 09 CONDENSED INTERIM INCOME STATEMENT 10 CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME 11 CONDENSED INTERIM DISTRIBUTION STATEMENT 12 CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUND 13 CONDENSED INTERIM CASH FLOW STATEMENT 14 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS 15 Quarterly Report
4. NAFA ISLAMIC ENERGY FUND Mr . Nausherwan Adil Dr. Amjad Waheed Mr. Aamir Sattar Mr. Abdul Hadi Palekar Mr. Foo Chiah Shiung (Kelvin Foo) Mr. Lui Mang Yin (Martin Lui) Mr. Kamal Amir Chinoy Mr. Shehryar Faruque Mr. Humayun Bashir Chairman Chief Executive Officer Director Director Director Director Director Director Director Chief Financial Officer Mr. Khalid Mehmood Mr. Foo Chiah Shiung (Kelvin Foo) Mr. Aamir Sattar Human Resource and Remuneration Committee Mr. Kamal Amir Chinoy Mr. Lui Mang Yin (Martin Lui) Mr. Abdul Hadi Palekar Chairman Member Member BankIslami Pakistan Limited Meezan Bank Limited Dubai Islamic Bank Pakistan Limited Habib Bank Limited Allied Bank Limited Habib Meropolitan Bank Limited Quarterly Report Page 03
5. NAFA ISLAMIC ENERGY FUND Auditors A .F. Ferguson & Co. Chartered Accountants State Life Building No. 1-C I.I. Chundrigar Road, P.O.Box 4716 Karachi. Legal Advisor M/s Jooma Law Associates 205, E.I. Lines, Dr. Daudpota Road, Karachi. 7th Floor Clifton Diamond Building, Block No. 4, Scheme No. 5, Clifton Karachi. UAN: 111-111NFA (111-111-632), (Toll Free): 0800-20001, Fax: (021) 35825329 Website: www.nafafunds.com Lahore Office: 7-Noon Avenue, Canal Bank, Muslim Town, Lahore. UAN: 042-111-111-632 Fax: 92-42-35861095 Islamabad Office: Plot No. 395, 396 Industrial Area, I-9/3 Islamabad. UAN: 051-111-111-632 Phone: 051-2514987 Fax: 051-4859031 Peshawar Office: 1st Floor, Haji Tehmas Centre, Near KFC, Tehkal Payan University Road, Peshawar. Phone: 92-91-5711784, 5711782 Fax: 92-91-5211780 Multan Office: Page 04 Quarterly Report
6. NAFA ISLAMIC ENERGY FUND DIRECTORS ’ REPORT The Board of Directors of NBP Fullerton Asset Management Limited is pleased to present the unaudited financial statements of NAFA Islamic Energy Fund (NIEF) for the period ended March 31, 2017. Fund’s Performance The Fund size of NIEF at the end of the period stood at Rs.2,863 million, 177% higher than at June 30, 2016. During the period the unit price of NAFA Islamic Energy Fund (NIEF) has increased from Rs. 10.5499 on June 30, 2016 to Rs. 14.4246 on March 31, 2017, thus showing an increase of 36.73%. The Benchmark (KMI-30 Index) increased by 23.67%. Thus, the Fund has outperformed its Benchmark by 13.06% during the period under review. Since inception (April 21, 2016), the unit price of the Fund has shown a growth of 49.70% as compared to 38.77% increase in its Benchmark. Thus, the Fund has outperformed its Benchmark by 10.93%. This performance is net of management fee and all other expenses. After lackluster stock market performance in FY16, the stock market bounced back sharply in 9MFY17, delivering impressive return of 27.5%. It is however worthwhile to note that most of the gains were made during 1HFY17 in which the benchmark KSE-100 index surged by 26.5%. Favorable macroeconomic indicators such as modest inflation, record low interest rates, all time high forex reserves coupled with reclassification of PSX into MSCI emerging market index from frontier market underpinned the strong run-up in the market during 1HFY17. Though the market carried on its momentum entering into 3QFY17 as KSE-100 index crested at all time high level of 50,192 on 26th January, the market remained quite jittery in the subsequent period. Rising political uncertainty unnerved the investors, triggering panic sell-off by the investors. Rising risks to the external account from widening current account deficit and stagnating foreign remittances further soured the investors’ sentiments. Engineering, Chemicals, Autos, Oil & Gas Marketing Companies and Textiles delivered superior returns during 9MFY17, while Fertilizers, E&Ps, Pharmaceuticals and Power sector underperformed the market during the period. Foreign investors remained large net sellers with outflows of USD483 mn during the aforesaid period. On the local side, Mutual Funds remained the main net buyers taking fresh equity exposure worth USD419 mn absorbing most of the foreign selling. Other than Mutual Funds, Insurance and other Companies also remained net buyers investing USD152 mn and USD131 mn, respectively. Amongst the local investors, Banks/DFIs significantly liquidated their equity position worth USD181 mn. The Fund has earned total income of Rs.832.964 million during the period. After deducting expenses of Rs.63.893 million, the net income is Rs.769.071 million. The below chart presents the asset allocation of NIEF. Power Generation & Distribution 15.18% Oil & Gas Exploration Companies 33.01% Quarterly Report Refinery 7.29% Cash Equivalents and Others including receivables 9.69% Oil & Gas Marketing Companies 34.83% Page 05
7. NAFA ISLAMIC ENERGY FUND NIEF Performance versus Benchmark (Since Inception) 60.0% NIEF Benchmark 50.0% 49.7% 40.0% 38.8% 30.0% 20.0% 17-Mar-17 15-Feb-17 02-Mar-17 31-Jan-17 16-Jan-17 01-Jan-17 17-Dec-16 02-Dec-16 17-Nov-16 18-Oct-16 02-Nov-16 03-Oct-16 18-Sep-16 03-Sep-16 19-Aug-16 04-Aug-16 20-Jul-16 05-Jul-16 20-Jun-16 05-Jun-16 21-May-16 06-May-16 21-Apr-16 0.0% 31-Mar-17 10.0% Acknowledgement The Board takes this opportunity to thank its valued unit-holders for their confidence and trust in the Management Company, and providing the opportunity to serve them. It also offers its sincere gratitude to the Securities & Exchange Commission of Pakistan and State Bank of Pakistan for their patronage and guidance. The Board also wishes to place on record its appreciation for the hard work, dedication and commitment shown by the staff and the Trustee. On behalf of the Board of NBP Fullerton Asset Management Limited Chief Executive Director Date: April 28, 2017 Place: Karachi. Page 06 Quarterly Report
8. NAFA ISLAMIC ENERGY FUND Power Generation & Distribution 15.18% Oil & Gas Exploration Companies 33.01% Quarterly Report Refinery 7.29% Cash Equivalents and Others including receivables 9.69% Oil & Gas Marketing Companies 34.83% Page 07
9. Page 08 0 .0% 31-Mar-17 17-Mar-17 02-Mar-17 15-Feb-17 31-Jan-17 16-Jan-17 01-Jan-17 17-Dec-16 02-Dec-16 17-Nov-16 02-Nov-16 NIEF 18-Oct-16 03-Oct-16 18-Sep-16 03-Sep-16 19-Aug-16 04-Aug-16 20-Jul-16 05-Jul-16 20-Jun-16 05-Jun-16 21-May-16 06-May-16 21-Apr-16 NAFA ISLAMIC ENERGY FUND 60.0% Benchmark 50.0% 49.7% 40.0% 38.8% 30.0% 20.0% 10.0% Quarterly Report
10. NAFA ISLAMIC ENERGY FUND CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES AS AT MARCH 31 , 2017 Note (Un-audited) March 31, 2017 Audited June 30, 2016 (Rupees in '000) ASSETS Balances with banks Investments Dividend and profit receivable Recievable against issue of units Receivable against sale of investments Preliminary expenses and floatation costs Advances, deposits and prepayments Total assets 319,956 2,585,633 6,633 1,497 12,785 1,853 5,617 2,933,974 123,181 959,794 2,766 202,911 2,195 2,600 1,293,447 38,035 709 1,514 3,642 26,971 70,871 10,497 203 173 240,024 80 9,371 260,348 NET ASSETS 2,863,103 1,033,099 UNIT HOLDERS' FUND (AS PER STATEMENT ATTACHED) 2,863,103 1,033,099 4 LIABILITIES Payable to NBP Fullerton Asset Management Limited - Management Company Payable to the Central Depository Company of Pakistan Limited - Trustee Payable to the Securities and Exchange Commission of Pakistan Payable against redemption of units Dividend payable Accrued expenses and other liabilities Total liabilities CONTINGENCIES AND COMMITMENTS 6 NUMBER OF UNITS IN ISSUE -----------Number of units--------- 198,488,052 97,924,755 --------------(Rupees)-------------NET ASSET VALUE PER UNIT 14.4246 10.5499 The annexed notes 1 to 12 form an integral part of this condensed interim financial information. For NBP Fullerton Asset Management Limited (Management Company) Chief Executive Quarterly Report Director Page 09
11. NAFA ISLAMIC ENERGY FUND CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED) FOR THE NINE MONTHS PERIOD AND QUARTER ENDED MARCH 31, 2017 Note INCOME Nine months ended Quarter ended March 31, 2017 ---------- Rupees in '000 ---------- 88,123 45,669 11,848 60,044 17,322 3,735 512,480 658,120 32,106 113,207 31,872 4,143 1,594 959 2,344 305 1,514 342 289 2,035 75 2 41 1,776 302 603 48,196 14,755 1,918 738 959 984 128 701 113 113 768 25 13 1,776 152 309 23,452 Net income from operating activities 609,924 89,755 Element of income / (loss) and capital gains / (losses) included in the prices of units issued less those in units redeemed - net 174,844 22,100 (15,697) (15,697) 769,071 96,158 Capital gain on sale of investments - net Dividend income Profit on bank deposits Unrealised appreciation on re-measurement of investments classified as financial assets 'at fair value through profit or loss' - net Total income 4.2 EXPENSES Remuneration of NBP Fullerton Asset Management Limited Management Company Sindh Sales Tax on remuneration of the Management Company Accounting and operational charges Selling and marketing expense Remuneration of the Central Depository Company of Pakistan Limited - Trustee Sindh Sales Tax on remuneration of the Trustee Annual fee of the Securities and Exchange Commission of Pakistan Amortisation of preliminary expenses and floatation costs Auditors' remuneration Securities transaction cost Printing expenses Legal fee Listing fee Provision for Sindh Workers' Welfare Fund- previous years Shariah Advisor Fee Settlement and bank charges Total operating expenses Provision for Sindh workers' welfare fund 9 5 Net income for the period before taxation Taxation - 7 Net income for the period after taxation 769,071 96,158 The annexed notes 1 to 12 form an integral part of this condensed interim financial information. For NBP Fullerton Asset Management Limited (Management Company) Chief Executive Page 10 Director Quarterly Report
12. NAFA ISLAMIC ENERGY FUND CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THE NINE MONTHS PERIOD AND QUARTER ENDED MARCH 31, 2017 Nine months ended Quarter ended March 31, 2017 ---------- Rupees in '000 ---------- Net income for the period after taxation 769,071 - Other comprehensive income for the period Total comprehensive income for the period 96,158 769,071 96,158 The annexed notes 1 to 12 form an integral part of this condensed interim financial information. For NBP Fullerton Asset Management Limited (Management Company) Chief Executive Quarterly Report Director Page 11
13. NAFA ISLAMIC ENERGY FUND CONDENSED INTERIM DISTRIBUTION STATEMENT (UN-AUDITED) FOR THE NINE MONTHS PERIOD AND QUARTER ENDED MARCH 31, 2017 Nine months ended Quarter ended March 31, 2017 ---------- Rupees in '000 ---------- Undistributed income at the beginning of the period (9,347) 63,199 53,852 246,391 480,374 726,765 Net income for the period after taxation 769,071 96,158 Undistributed income carried forward 822,923 822,923 310,443 512,480 822,923 310,443 512,480 822,923 Realised (loss) / gain Unrealised gain Undistributed income at the end of the period comprising of: Realised gain Unrealised gain The annexed notes 1 to 12 form an integral part of this condensed interim financial information. For NBP Fullerton Asset Management Limited (Management Company) Chief Executive Page 12 Director Quarterly Report
14. NAFA ISLAMIC ENERGY FUND CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS ' FUND (UN-AUDITED) FOR THE NINE MONTHS PERIOD AND QUARTER ENDED MARCH 31, 2017 Nine months ended Quarter ended March 31, 2017 ---------- Rupees in '000 ---------- Net assets at the beginning of the period 1,033,099 2,710,760 Issue of 192,130,332 units Redemption of 91,567,035 units 2,468,528 (1,232,751) 1,235,777 796,706 (718,421) 78,285 (174,844) (22,100) 512,480 88,123 168,468 769,071 32,106 60,044 4,008 96,158 2,863,103 2,863,103 Element of (income) / loss and capital (gains) / losses included in the prices of units issued less those in units redeemed - net Net unrealised appreciation on re-measurement of investment classified as 'financial assets at fair value through profit or loss' Capital gain on sale of investments - net Other net income for the period Net income for the period Net assets at the end of the period The annexed notes 1 to 12 form an integral part of this condensed interim financial information. For NBP Fullerton Asset Management Limited (Management Company) Chief Executive Quarterly Report Director Page 13
15. NAFA ISLAMIC ENERGY FUND CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) FOR THE NINE MONTHS PERIOD AND QUARTER ENDED MARCH 31, 2017 Nine months ended Quarter ended March 31, 2017 ---------- Rupees in '000 ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period before taxation 769,071 96,158 Adjustments for: Net unrealised appreciation on re-measurement of investments classified as financial assets 'at fair value through profit or loss' - net (Gain) on sale of investments - net Amortisation of preliminary expenses and floatation costs Element of (income) / loss and capital (gains) / losses included in the prices of units issued less those in units redeemed - net (512,480) (88,123) 342 (32,106) (60,044) 113 (174,844) (6,034) (22,100) (17,979) (1,025,236) (3,017) (3,867) (12,785) (1,044,905) (103,153) 14 (240) 20,609 (82,770) 27,538 506 1,341 17,600 46,985 15,125 377 701 18,639 34,922 Net cash used in operating activities (1,003,954) (65,827) CASH FLOWS FROM FINANCING ACTIVITIES Net receipts from issue of units Payments on redemption of units Dividend paid Net cash generated from financing activities 2,669,942 (1,469,133) (80) 1,200,729 (795,209) 714,779 80,430 Net increase in cash and cash equivalents during the period Cash and cash equivalents at the beginning of the period 196,775 123,181 14,603 305,353 Cash and cash equivalents at the end of the period 319,956 319,956 Decrease / (Increase) in assets Investments - net Advances, deposits and prepayments Dividend and profit receivable Receivable against sale of investments (Decrease) / Increase in liabilities Payable to NBP Fullerton Asset Management Limited - Management company Payable to the Central Depository Company of Pakistan Limited - Trustee Payable to the Securities and Exchange Commission of Pakistan Accrued expenses and other liabilities The annexed notes 1 to 12 form an integral part of this condensed interim financial information. For NBP Fullerton Asset Management Limited (Management Company) Chief Executive Page 14 Director Quarterly Report
16. NAFA ISLAMIC ENERGY FUND NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED) FOR THE NINE MONTHS PERIOD AND QUARTER ENDED MARCH 31, 2017 1 LEGAL STATUS AND NATURE OF BUSINESS NAFA Islamic Energy Fund (the Fund) was established under a Trust Deed executed between NBP Fullerton Asset Management Limited (NAFA) as the Management Company and Central Depository Company of Pakistan Limited (CDC) as the Trustee. The Trust Deed was executed on March 28, 2016 and was approved by the Securities and Exchange Commission of Pakistan (SECP) on April 07, 2016 in accordance with the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the NBFC Regulations). The Management Company of the Fund has been licensed to act as an Asset Management Company under the NBFC Rules through a certificate of registration issued by the SECP. The registered office of the Management Company is situated at 7th floor, Clifton Diamond Building, Block 4, Scheme No. 5, Clifton, Karachi. The Fund's pre-IPO investment was received on April 19, 2016. It is an open-ended mutual fund and is listed on the Pakistan Stock Exchange Limited. Units are offered for public subscription on a continuous basis. The units of the Fund are transferable and can be redeemed by surrendering them to the Fund. The Fund is categorised as an Open-End "Shariah Compliant Equity Scheme" as per the criteria laid down by the Securities and Exchange Commission of Pakistan for categorisation of Collective Investment Schemes (CIS). The core objective of the Fund is to provide investors with long term capital growth from an actively managed portfolio of shariah compliant listed equities belonging to the energy sector. The Pakistan Credit Rating Agency Limited (PACRA) has assigned an asset manager rating of “AM1” w.e.f April 21, 2017 to the Management Company. The Fund has not been rated so far. The title to the assets of the Fund is held in the name of Central Depository Company of Pakistan Limited (CDC) as the Trustee of the Fund. The duration of the Fund is perpetual. However, SECP or the Management Company may wind it up on the occurrence of certain events as specified in the offering document of the Fund. Comparative information is not available as the Fund was launched on April 7, 2016. 2 BASIS OF PREPARATION 2.1 Statement of Compliance This condensed interim financial information has been prepared in accordance with the approved accounting standards as applicable in Pakistan for interim financial reporting. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, the requirements of the Trust Deed, the Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003 (the NBFC Rules), the Non-Banking Finance and Notified Entities Regulations, 2008 (the NBFC Regulations) and the directives issued by the Securities and Exchange Commission of Pakistan (SECP). Wherever the requirements of the Trust Deed, the NBFC Rules, the NBFC Regulations or the directives issued by the SECP differ with the requirements of IFRSs, the requirements of the Trust Deed, the NBFC Rules, the NBFC Regulations or the directives issued by the SECP prevail. Quarterly Report Page 15
17. NAFA ISLAMIC ENERGY FUND The disclosures made in this condensed interim financial information have , however, been limited based on the requirements of International Accounting Standard 34: 'Interim Financial Reporting'. This condensed interim financial information does not include all the information and disclosures required in a full set of financial statements and should be read in conjunction with the published audited financial statements of the Fund for the period ended June 30, 2016. In compliance with Schedule V of the Non-Banking Finance Companies and Notified Entities Regulations, 2008, the directors of the Management Company hereby declare that this condensed interim financial information gives a true and fair view of the state of the Fund’s affairs as at March 31, 2017. 3 SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES, ESTIMATES, JUDGMENTS AND CHANGES THEREIN The accounting policies applied in the preparation of this condensed interim financial information are the same as those applied in the preparation of the published financial statements of the Fund for the period ended June 30, 2016. Note INVESTMENTS 4 Investments at fair value through profit or loss - held for trading - Listed equity securities 4.1 (Un-audited) Audited March 31, June 30, 2017 2016 --------- Rupees in '000 --------- 4.1 2,585,633 959,794 Listed equity securities All shares have a nominal face value of Rs.10 each except for the shares of K-Electric Limited which have a face value of Rs 3.5 each. Number of shares/ certificates Name of the investee company Purchased Bonus / right As at July during shares issued 01, 2016 the period during the period Sold during the period As at March 31, 2017 Market value as a percentage of Paid up value Market value of shares held Net assets As at Total market as a percentage of of the fund March 31, paid-up capital of value of investments investee company 2017 Rupees in ‘000 -------------%------------- REFINERY Attock Refinery Limited National Refinery Limited 183,600 73,200 203,800 84,100 - 76,100 60,300 311,300 97,000 139,715 69,156 208,871 5.15 2.55 7.70 5.40 2.67 8.07 0.36 0.12 OIL AND GAS EXPLORATION COMPANIES Mari Petroleum Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited 157,550 499,300 317,900 677,500 75,400 963,400 200,200 935,600 - 7,800 251,900 66,300 179,900 225,150 1,210,800 451,800 1,433,200 342,334 179,574 201,074 222,017 944,999 12.63 6.62 7.42 8.19 34.86 13.24 6.95 7.78 8.59 36.56 0.20 0.03 0.19 0.07 OIL AND GAS MARKETING COMPANIES 107,500 Attock Petroleum Limited 96,100 143,800 Hascol Petroleum Limited 330,800 Pakistan State Oil Company Limited 340,900 331,300 Shell Pakistan Limited 176,600 Sui Northern Gas Pipelines Limited 1,625,000 1,420,000 Sui Southern Gas Company Limited - 2,209,000 - 11,700 157,000 99,400 1,156,500 91,000 191,900 143,800 514,700 408,500 1,888,500 2,118,000 121,816 43,125 217,986 266,444 269,621 78,239 997,231 4.49 1.51 8.04 9.83 9.95 2.89 36.71 4.71 1.67 8.43 10.30 10.43 3.03 38.57 0.23 0.01 0.19 0.38 0.30 0.43 POWER GENERATION & DISTRIBUTION Kot Addu Power Company Limited 757,000 837,500 K-Electric Limited * 6,429,000 11,987,500 The Hub Power Company Limited 386,300 1,116,000 - 90,000 2,948,000 73,000 1,504,500 15,468,500 1,429,300 120,676 126,532 187,324 434,532 4.45 4.67 6.91 16.03 4.67 4.89 7.24 16.81 0.17 0.68 0.12 Total March 31, 2017 2,585,633 90.30 100.00 Carrying value as at March 31, 2017 2,073,153 Page 16 Quarterly Report
18. NAFA ISLAMIC ENERGY FUND Note 4 .2 Unrealised (diminution) / appreciation on re-measurement of investments classified as financial assets 'at fair value through profit or loss' Market value of securities Less: Carrying amount of securities 5 4.1 Audited (Un-audited) June 30, March 31, 2016 2017 --------- Rupees in '000 --------- 2,585,633 (2,073,153) 512,480 959,794 (896,595) 63,199 PROVISION FOR SINDH WORKERS' WELFARE FUND The Sindh Revenue Board (SRB) had written to few mutual funds in January 2016 to register and pay Sindh Workers Welfare Fund (SWWF) for the accounting year closing on or after December 31, 2013. The MUFAP reviewed the issue and based on an opinion decided that SWWF is not applicable on mutual funds as they are not financial institutions as required by SWWF Act, 2014. The MUFAP wrote to the SRB that mutual funds are not establishments and are pass through vehicles hence, they do not have any worker and no SWWF is payable by them. The SRB responded back that as mutual funds are included in definition of financial institutions in the Financial Institutions (Recovery of Finance) Ordinance, 2001, therefore SWWF is applicable on mutual funds. The MUFAP has taken up this matter before the Sindh Finance Ministry to exclude mutual funds from SWWF. In view of the above developments regarding the applicability of SWWF on CISs / mutual funds the MUFAP has recommended that the provision in respect of Sindh WWF should be made on a prudent basis on January 12, 2017 with effect from the date of enactment of the Sindh WWF Act, 2014 (i.e. starting from May 21, 2015). Accordingly, the provision for SWWF is being made on a daily basis going forward. The above decision was communicated to the SECP and the Pakistan Stock Exchange Limited on January 12, 2017 and the SECP vide its letter dated February 1, 2017 has advised the MUFAP that the adjustments relating to the above should be prospective and supported by adequate disclosures in the financial statements of the CISs/ mutual funds. Accordingly, the Fund has recorded this adjustment in its books on January 12, 2017. The scheme has maintained provision against Sindh Workers’ Welfare Fund’s liability to the tune of Rs 17.472 million If the same were not been made, the NAV per unit of the scheme would have been higher by Rs 0.088. 6 CONTINGENCIES AND COMMITMENTS There were no contingencies and commitments outstanding as at March 31, 2017 and June 30, 2016. 7 TAXATION The income of the Fund is exempt from income tax as per clause 99 of part I of the Second Schedule to the Income Tax Ordinance, 2001 subject to the condition that not less than ninety percent of its accounting income for the year, as reduced by capital gains, whether realised or unrealised, is distributed in cash to the unit holders. The management intends to distribute 90 percent of the Funds net accounting income earned by the year end as cash dividend to the unit holders. Accordingly, no provision in respect of taxation has been made in this condensed interim financial information. The Fund is also exempt from the provisions of section 113 (minimum tax) under clause 11A of Part IV of the Second Schedule to the Income Tax Ordinance, 2001. Quarterly Report Page 17
19. NAFA ISLAMIC ENERGY FUND 8 TOTAL EXPENSE RATIO Total expense ratio (all the expenses incurred during the period divided by average net asset value for the period) is 4% p.a including 1.47% representing government levies on Collective Investment Schemes such as Sales tax, Workers' Welfare Fund and Securities and Exchange Commission of Pakistan fee for the period. 9 SELLING AND MARKETING EXPENSE During the current period, the SECP through its Circular No. SCD/PRDD/Circular/361/2016 ( Circular No. 40 of 2016) dated December 30, 2016 introduced allowance for charging of selling and marketing expenses initially for three years (effective from January 01, 2017 till December 31, 2019) to the open end equity, asset allocation, and index funds maximum of 0.4% of the average annual net assets or the actual expenses, whichever is lower, subject to the conditions mentioned in the aforementioned Circular and its amendment of condition 05 through Circular No. SCD/PRDD/Circular/418/2016 (Circular No. 05 of 2017) dated February 13, 2017. Based on the requirements to fulfil for charging selling and marketing expense, the Management Company has started accruing the expense to the Fund at the rate of 0.4% per annum of the average annual net assets of the Fund w.e.f March 01, 2017. 10 TRANSACTIONS WITH RELATED PARTIES / CONNECTED PERSONS 10.1 Connected persons include NBP Fullerton Asset Management Limited being the Management Company, Central Depository Company of Pakistan Limited being the Trustee, National Bank of Pakistan, other collective investment schemes managed by the Management Company and directors and officers of the Management Company. 10.2 The transactions with connected persons are in the normal course of business, at contracted rates and terms determined in accordance with market rates. 10.3 Remuneration and front-end load payable to the Management Company is determined in accordance with the provisions of the NBFC Regulations and the Trust Deed respectively. 10.4 Remuneration payable to the Trustee is determined in accordance with the provisions of the NBFC regulations and the Trust Deed. 10.5 Details of transactions with connected persons are as follows: NBP Fullerton Asset Management Limited - Management Company Remuneration of the Management Company Sindh sales tax on remuneration of the Management Company Accounting and operational charges to the Management Company Sales load paid to the Management Company ----------(Un-Audited)---------Nine months ended Quarter ended March 31, March 31, 2017 2017 --------- Rupees in '000 --------31,872 4,143 1,594 4,140 14,755 1,918 738 - 2,344 305 984 128 Employees of the Management Company Units Issued / transfered in (3,979,059 units) Units redeemed / transfered out (3,473,061 units) 50,109 44,131 14,744 10,815 Pakistan Mobile Communication limited provident fund Units Redeemed / Transfered Out (9,98,312 Units) 13,623 13,623 Central Depository Company of Pakistan Limited - Trustee Remuneration Sindh sales tax on remuneration of Trustee Aamir Sattar - Director Units Issued / Transfered In (16,322 units) Page 18 200 - Quarterly Report
20. NAFA ISLAMIC ENERGY FUND (Un-Audited) Nine months ended March 31, 2017 (Audited) June 30, 2016 --------- Rupees in '000 --------- 10.6 Amounts / balances outstanding as at period end: NBP Fullerton Asset Management Limited - Management Company Management remuneration payable Sindh sales tax on remuneration Federal excise duty on remuneration Front-end load payable Sindh sales tax on front end load Federal excise duty on front end load Other payable - Initial deposit on opening of bank accounts - Listing fee - Security deposit paid to National Clearing Company of Pakistan Limited - Security deposit paid to Central Depository Company of Pakistan Limited - Preliminary expenses - Accounting and operational charges charged by the Management Company - Selling and marketing expenses payable Units held: 10,194,849 units (June 30, 2016: 10,194,849 units) 4,954 644 583 20,158 2,634 1,557 1,926 313 583 793 129 1,624 30 40 2,500 100 2,282 1,594 959 147,057 25 40 2,500 100 2,282 182 107,555 15,337 4,331 Central Depository Company of Pakistan Limited - Trustee Trustee fee Sindh sales tax on the remuneration of trustee Security deposit 600 109 100 178 25 100 Aamir Sattar - Director Units held: 16,322 units (June 30, 2016: Nil units) 235 - 14,241 - 1,644 566 Employees of the Management Company Units held: 1,063,261 units (June 30, 2016: 410,567 units ) Humayun Bashir - Director Units held: 987,239 units (June 30, 2016: Nil units) Summit Bank Limited Bank Balances Net amount payable against issuance of units from : NAFA Islamic Aggressive Income Fund NAFA Islamic Principal Protected Fund - II - 202,495 416 Net amount payable against redemption of units to : NAFA Financial Sector Income Fund NAFA Government Securities Liquid Fund NAFA Islamic Asset Allocation Fund NAFA Islamic Stock Fund NAFA Money Market Fund NAFA Stock Fund - 3,971 5,171 214,029 2,139 509 14,205 Quarterly Report Page 19