MCB Arif Habib Savings and Investments : MCBAH | MCB-Arif Habib Savings and Investments Limited - Transmission of Quarterly Report for the Period Ended December 31, 2022

TABLE OF CONTENTS

Vision, Mission and Core Values	02
Company Information	03
Directors' Report	04
Independent Auditor's Review Report	11
Condensed Interim Balance Sheet	12
Condensed Interim Profit & Loss Account (Un-audited)	13
Condensed Interim Statement of Comprehensive Income (Un-audited)	14
Condensed Interim Statement of Changes in Equity (Un-audited)	15
Condensed Interim Cash Flow Statement (Un-audited)	16
Notes to the Condensed Interim Financial Information (Un-audited)	17

MCB Arif Habib Savings and Investments Limited

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Vision

"To be the most coveted Savings and Investment company,

while leading the effort to make the saving

population and industry grow"

Mission

"To be the preferred Savings and Investment Manager in Pakistan

by being best in class in customer services

and maximizing stakeholders' value"

Core Values

HONESTY

We ensure to build trust through responsible actions and honest relationships with our colleagues, customers and stakeholders

INTEGRITY

We work with integrity in everything we do, and embody our principles when working with stakeholders as well as internal and external customers. We assure to promote the integrity for the ultimate benefit for everyone

ETHICS

As a trusted custodian of customer funds, we are committed to

conforming to the highest level of ethical standards in the workplace

that involves putting customer interest first and maintaining

our stakeholders trust in the Company

PROFESSIONALISM

We value everyone and treat our external and internal customers and our stakeholders with respect, dignity and professionalism

COMPANY INFORMATION

Credit Committee	Mr. Nasim Beg	Member
	Mr. Ahmed Jahangir	Member

A. F. Ferguson & Co.

(A Member Firm of PWC Network)

State Life Building 1-C

I.I. Chundrigar Road, Karachi.

Rating	AM1
MCB Arif Habib Savings and Investments Limited	03

DIRECTOR'S REPORT

FOR THE HALF YEAR ENDED DECEMBER 31, 2022

The Board of Directors of MCB-Arif Habib Savings and Investments Limited (MCBAH) are pleased to present report on the affairs of the company for the half year ended December 31, 2022.

PRINCIPAL BUSINESS

The Company is a Non-Banking Finance Company, licensed as Asset Management Company, Investment Advisor and Pension Fund Manager under the Securities and Exchange Commission of Pakistan's regulatory regime.

The BUSINESS ENVIROMENT

Economy and Money Market Review

The macroeconomic landscape continued to remain challenging. The economy was jolted with the worst floods in more than a decade, which caused severe damage to the infrastructure, wiped off crops, devastated livestock and resulted in the loss of precious lives. Earlier, elevated commodity prices due to pent up demand post Covid restrictions saw another upward push due to escalation of Russia-Ukraine conflict.

SBP foreign exchange reserves have fallen to critically low levels of USD 3.2 billion (import cover of less than 3 weeks) compared to USD 9.8 billion at the start of the fiscal year. Due to tough impact on vast majority of poor population, government has been reluctant to agree to harsh steps which are pre-condition to IMF loans such as increasing electricity, gas and petrol prices. Unlocking IMF funding however remains critical as the delay in the IMF program is leading to a slowdown in foreign flows from bilateral and multilateral partners.

The country posted a current account deficit (CAD) of USD 3.1 billion in first five months of the fiscal year 2023 (5MFY23) declining by 57% YoY compared to a deficit of USD 7.2 billion in the corresponding per iod last year. Narrowing trade deficit was the major contributor towards improving CAD as a 2.0% decrease in exports coupled with 16.2% drop in imports led to 26% contraction in trade deficit. The government initially kept a lid on imports through administrative measures such as imposing import quotas on selective imports. These import restrictions helped the Rupee gain some strength against the USD, from a low of 240 in July 2022 to PKR 226.4 at December 2022 end.

Headline inflation represented by CPI averaged 25.0% during the half as compared to 9.8% in the corresponding period last year. Higher food prices as an aftermath of floods coupled with higher electricity tariff and rising petroleum prices were the major contributors towards rising CPI. The inflationary pressures were broad based which is depicted by core inflation increasing to 16.4% compared to 12.3% at the end of last fiscal year. SBP increased the policy rate by a further 100bps to 16.0% in the latest monetary policy held in November 2022. On the fiscal side, FBR tax collection increased by 17.0% in 1HFY23 to PKR 3,428 billion compared to PKR 2,929 billion in the same period last year. This missed the target by 218 billion.

Secondary markets yields increased in the half on account of monetary tightening and an additional bout of inflationary pressures post floods. The 3,6 and 12 Month T-Bills yield increased by 171, 184 and 170 basis points (bps) respectively while 3,5 and 10 Years Bond yields rose by 219,168 and 78bps respectively during 1HFY23.

Equity Market Review

The KSE-100 index closed in negative territory, declining by 1,120 points (-2.7%) in 1HFY23 to close at 40,420 points. The initial exuberance on the account of the resumption of the IMF program and support from friendly countries soon washed away with catastrophic floods, which further deteriorated the already

MCB Arif Habib Savings and Investments Limited

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