JS Investments : Funds Quarterly Financial Statements - September 30, 2023

Better Investments for a Better Future!

Q U A R T E R L Y R E P O R T

S E P T E M B E R 3 0 , 2 0 2 3

J S G O V E R N M E N T S E C U R I T I E S F U N D

CONTENTS

Vision	03
Mission	04
Company Information	05
Directors' Report to the Unit Holders	06
CONDENSED INTERIM FINANCIAL STATEMENTS	08
Condensed Interim Statement of Assets and Liabilities	09
Condensed Interim Income Statement	10
Condensed Interim Statement of Comprehensive Income	11
Condensed Interim Statement of Cash Flows	12
Condensed Interim Statement of Movement in Unit Holders' Fund	13
Notes to the Condensed Interim Financial Statements	14

To be the preferred choiceVISION of every investor, offering

diverse and innovative investment solutions

MISSION

To establish a leadership position in bringing more investable asset classes and innovative products, while managing them with prudence and excellence

Better Investments for a Better Future!

COMPANY INFORMATION

Management Company

JS Investments Limited

19th Floor, The Centre, Plot # 28, SB-5 Abdullah Haroon Road, Saddar, Karachi-75600

Tel: [phone] Fax: [phone] E-mail:[e-mail]

Website: www.jsil.com

Board of Directors

Mr. Suleman Lalani	Non-Executive Director / Chairman
Ms. Iffat Zehra Mankani	Chief Executive Officer
Mr. Hasan Shahid	Non-Executive Director
Mr. Mirza M. Sadeed H. Barlas	Non-Executive Director
Mr. Atif Salim Malik	Non-Executive Director
Ms. Aisha Fariel Salahuddin	Non-Executive Independent Director
Ms. Mediha Kamal Afsar	Non-Executive Independent Director
Mr. Farooq Ahmed Malik	Non-Executive Independent Director

Chief Executive Officer

Ms. Iffat Zehra Mankani

Chief Financial Officer

Mr. Raheel Rehman

Chief Investment Officer

Mr. Syed Hussain Haider

Chief Operating Officer & Company Secretary

Mr. Muhammad Khawar Iqbal

Statutory Auditors

A.F Ferguson & Co. Chartered Accountants

Legal Advisors

Bawaney and Partners

3rd & 4th Floor, 68-C,Lane-13 Bokhari Commercial Area Phase-VI DHA, Karachi

Audit Committee

Ms. Mediha Kamal Afsar (Chairperson)

Mr. Hasan Shahid (Member)

Mr. Mirza M. Sadeed H. Barlas (Member)

Trustee

Digital Custodian Company Limited 4th Floor, Perdesi House

2/1, R-Y-16, Old Queens Road, Karachi - 75530

QUARTERLY REPORT 2023 05

Better Investments for a Better Future!

DIRECTORS' REPORT TO THE UNIT HOLDERS

The Board of Directors of JS Investments Limited has the pleasure of presenting the unaudited Financial Statements of JS Government Securities Fund (the Fund) for the period ended September 30, 2023.

Economy Review:

In the first quarter of the fiscal year 2024, the country continued to confront a challenging economic environment. Notably, the Stand-By Arrangement, secured at the last moment, delivered short-term relief from the looming risk of default and aided the depleting forex reserves. Consequently, SBP reserves rose from USD 4.5bn in June 2023 to USD 7.6bn in September 2023. However, concerns over elevated inflation, substantial currency devaluation, and increased political uncertainty persisted during the period.

The current account exhibited a deficit of USD 935mn in 2MFY24, in contrast to the USD 2.04bn deficit in the same period last year. The narrowing deficit is attributed to restrictive measures on imports, currency devaluation, and muted economic activity, causing imports to decline faster than exports. Concurrently, remittances experienced a decline of approximately 21.6% Y-o-Y, amounting to USD 4.1bn during 2MFY24 compared to USD 5.3bn in 2MFY23. This decline resulted from the economic slowdown in host countries and increased usage of informal channels due to a significant disparity between the open market and official exchange rates.

During 1QFY24, inflation averaged 29.04%, as opposed to the 25.12% observed in 1QFY23, driven by tariff adjustments in the energy sector, a weaker currency, and escalated commodity prices. In response to this persistent inflationary pressure, SBP maintained the policy rate at 22% during the quarter.

Looking ahead, the trajectory of economic progress hinges on the effective management of external account challenges, maintenance of political stability amidst upcoming general elections, containment of inflation, and implementation of the IMF policies under the Stand-By Arrangement. These strategies will also serve as the cornerstone for negotiations concerning a potential comprehensive, long-term IMF program.

Income / Money Market Review:

In 1QFY24, Pakistan's prevailing economic and political conditions continued to steer money managers towards favoring the shorter end of the yield curve, primarily in response to a contractionary monetary policy. During the period, SBP borrowed PKR 8.3tr in T-bills auctions, slightly below the PKR 8.7tr target; however, funding through PIB auctions fell short at PKR 83.4bn against a PKR 320bn target. The bidding patterns in the T-Bill auctions during the quarter consistently indicated a preference for the shorter 3-month tenor, reflecting a cautious approach towards duration risk.

At the end of the quarter, secondary market yields for 3-month and 3-year tenors stood at 22.46% and 19.11%, respective- ly, and this continued to demonstrate the presence of a yield curve inversion. In the foreseeable future, the bond market will closely monitor any possible indications of a shift toward monetary policy easing, particularly as headline inflation is expected to subside mainly due to the high base effect. Nevertheless, the external account situation will significantly influence this outlook.

Review of Fund Performance

The Fund's annualized return was 22.23% for the period ended September 30, 2023, against the benchmark return of 23.49%. The fund's Net Assets moved from PKR 2.42 billion (June 30, 2023) to PKR 7.61 billion as of September 30, 2023. The total expense ratio (TER) of the Fund is 0.14%, which includes 0.02% of government levies on the Fund.

06 QUARTERLY REPORT 2023

Better Investments for a Better Future!

Asset Manager Rating

Pakistan Credit Rating Agency Limited (PACRA) has assigned Management Company's asset manager rating of 'AM2+' with a 'stable outlook' to JS Investments Limited. This rating underscores our dedication to maintaining high-quality management standards, reflecting positively on the overall performance and outlook of our operations. Further, Stability rating of "AA(f)" was assigned to the Fund as at October 05, 2023 by PACRA.

Acknowledgment

The directors express their gratitude to the Securities and Exchange Commission of Pakistan and Digital Custodian Service for their valuable support, assistance and guidance. The Board also thanks the employees of the Management Company for their dedication and hard work and the unit holders for their confidence in the Management.

Director	Chief Executive Officer
	Iffat Zehra Mankani

October 20, 2023

Karachi

QUARTERLY REPORT 2023 07

CONDENSED INTERIM

FINANCIAL STATEMENTS

CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES

AS AT SEPTEMBER 30, 2023

September 30,

2023

(Unaudited)

June 30,

2023

(Audited)

	Note
	------------------	Rupees	------------------
Assets
Bank balances	5	2,581,914,293			15,361,504
Investments in government securities	10	4,885,362,350			2,403,422,475
Profit / Markup receivable	6	147,108,487			19,356
Deferred formation cost	7	1,045,067			1,114,619
Prepayments, advances and other receivables	8	657,751			493,156
Total assets
		7,616,087,948			2,420,411,110
Liabilities
Payable to JS Investments Limited - Management Company	9	128,729			3,764,676
Payable to Digital Custodian Company Limited - Trustee	11	350,403			189,396
Annual fee payable to the Securities and
Exchange Commission of Pakistan	12	326,139			383,314
Accrued expenses and other liabilities	13	704,461			437,294
Total liabilities
		1,509,732			4,774,680
Contingencies and commitments	14
Net assets
	7,614,578,216			2,415,636,430
Unit holders' funds
	7,614,578,216			2,415,636,430
		------------	Number of units ------------
Number of units in issue		66,322,454			22,218,944
		------------------	Rupees	------------------
Net assets value per unit		114.81			108.72

The annexed notes from 1 to 22 and annexure form an integral part of these condensed interim financial statements.

Chief Financial Officer

Chief Executive Officer

Director

09 QUARTERLY REPORT 2023

CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

Quarter ended

September 30,

2023

For the Period

from July 14, 2022

to September 30, 2022

Note	------------------ Rupees ------------------

Income

Profit/markup on bank balances & government securities Gain / (loss) on sale of investments at fair value

through profit or loss - net

Net unrealised gain on re-measurement of investments 'at fair value through profit or loss'

Total Income
Expenses
Remuneration of the Trustee	11.1
Sindh sales tax on Trustee remuneration	11.2
Annual fee to the Securities and Exchange
Commission of Pakistan (SECP)	12
Brokerage and settlement charges
Listing Fee - PSX
Rating Fee - PACRA
SECP Supervisory fee
Auditors' remuneration
Printing and Stationery
Amortization of deferred formation costs	7
Total Expenses
Net income for the period before tax
Taxation	16
Net income for the period after tax

Allocation of Net Income For the period

Net income for the period after tax

Income already paid on units redeemed

Accounting income available for distribution:

Relating to Capital Gain

Excluding Capital Gain

185,891,376

329,323

366,328

186,587,027

594,316

77,261

643,964

291,666

7,062

47,178

625

193,050

49,988

69,552

1,974,662

184,612,365

-

184,612,365

184,612,365

(10,164)

184,602,201

695,651

183,906,550

184,602,201

4,837,004

(79,768)

23,190

4,780,426

106,849

13,906

6,219

35,743

-

-

-

98,841

24,960

55,598

342,116

4,438,310

-

4,438,310

4,438,310

-

4,438,310

(56,578)

4,494,888

4,438,310

The annexed notes from 1 to 22 and annexure form an integral part of these condensed interim financial statements.

Chief Financial Officer	Chief Executive Officer	Director
		QUARTERLY REPORT 2023 10