NAMAL IPO FUND

Interim Report

For the Six months ended 30th September 2017

National Asset Management Limited 07,Glen Aber Place Colombo 03. Phone : 2445911 Fax : 2445903 Email : info@namal.lk

Table of Contents

Report of the Investment Manager 1

Statement of Comprehensive Income 2

Statement of Financial Position 3

Statement of Movement in Unit Holders Fund 4

Notes To the Acccounts 5-6

Corporate Information 7

NAMAL IPO FUNDInterim Report 2017

NAMAL IPO FUND INTERIM REPORT

1HFY18

Dear Investor,

We take pleasure in presenting the interim report of the Namal IPO Fund (NIPO) for the 6 months ended 30th September 2017.

Performance Review The NAMAL IPO Fund carried a cash balance of LKR 0.24 Mn at the end of September 2017.

Market Review During the period under review, the ASPI gained 6.2% and the S&P SL20 gained 7.4%, led by continued foreign buying over the period. However, in September, the acquisition of a majority stake in Singer PLC by Hayleys led to net outflow LKR 9.5 Bn. For the 6 month period the CSE reported a net inflow of LKR 12.3 Bn. The average daily turnover increased to LKR 1,014 Mn from LKR 743 Mn in 1HFY17. Foreign participation accounted for 45.2% of turnover during the period.

Benchmark 12 month Treasury bill yields continued to decline in primary market auctions in 1HFY18 and stood at 9.10% at the end of September. Further, the CBSL announced the removal of caps imposed on interest rates on credit products, effective from 3QCY2017, to curb private sector credit growth and inflationary pressures in the economy. Policy rates were held steady in 1HFY2018 amidst declining private sector credit growth.

On the economic front, real GDP grew at 3.9% in 1HCY2017 compared to 3.7% growth in 1HCY2016. The growth was led by construction sector. External sector showed mixed performance in 1HFY2018. Exports gained momentum in Q2 and Q3 of CY2017. Nevertheless, trade deficit expanded by 12.1% to USD 6,184.0 Mn in the first 8 months, as a result of higher import expenditures. During the same period, tourism earnings grew 3.5% to USD 2,413.7 Mn, while worker remittances declined 6.3% to USD 4,503.3 Mn. The overall BoP position recorded a surplus of USD 2,174.9 Mn at the end of August compared to USD 211.5 Mn surplus reported in the comparative period of last year, mainly aided by foreign currency receipts on account of additional borrowings and grants.

Sincerely, The Fund Management Team 31th October 2017

1

STATEMENT OF COMPREHENSIVE INCOMEFor the six month period ended September

Notes 2017 2016

Rs. Mn. Rs. Mn.INVESTMENT INCOMEDividend Income 10 - 0.06 Interest Income 10 0.01 0.10

7.2 - 0.04 0.01 0.20

EXPENSES

Management Fees (0.00) (0.03) Trustee Fees (0.00) (0.00) Custody Fees (0.14) (0.14) Audit Fees (0.10) (0.11) Other Expenses (0.00) (0.00) Bank Charges (0.00) - Total Operating Expenses (0.24) (0.28)

NET PROFIT (0.23) (0.07)

FINANCE COST - Interest Expense - - Treasury Bond Premium Amortisation - -

- -

PROFIT/ (LOSS) AFTER DEDUCTIONS AND BEFORE TAX (0.23) (0.07) Income Tax Expense - -

PROFIT/ (LOSS) AFTER DISTRIBUTIONS AND TAX (0.23) (0.07)

(0.23) (0.07)

NAMAL IPO FUND

INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS

Net Change in Unrealised Losses on Financial Assets Held for Trading

Interim Report 2017

2

STATEMENT OF CHANGES IN UNITHOLDERS' FUNDSFor the six month period ended September

2017 2016Rs. Mn. Rs. Mn.

UNIT HOLDERS' FUNDS AT THE BEGINNING OF THE PERIOD 1.62 4.77

Increase/(Decrease) in Net Assets Attributable to Unit Holders' Funds (0.23) (0.07)

Received on Creation of Units - -

Payments on Cancellation of Units (1.08) (0.37)

UNIT HOLDERS' FUNDS AT THE END OF THE PERIOD 0.31 4.32

NAMAL IPO FUND

Interim Report 2017

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NOTES TO THE FINANCIAL STATEMENTSFor the six month period ended September

1

2 Income is recognised on accrual basis

2.1 Interest on repurchase agreements is shown together with the applicable notional tax credit which is set off against the income tax payable by the fund.

3 The profit and income of the fund is liable for income tax at the rate of 10% for the year of assessment 2017/2018 as specified in part A of the Second Schedule to the Inland Revenue Act No. 10 of 2006.

4

5

2017 20166 3.90 10.59

45,943.80 384,215.30

7 FINANCIAL ASSETS - HELD FOR TRADING 2017 2016Rs.Mn Rs.Mn

Equity Securities - 1.90 Debt Securities - Government Treasury Bills - -

- 1.90

7.1 Investments in Quoted Equity Securities Cost as at 30th September - 1.29 Provision for Depreciation of Quoted Equity Securities - 0.61 Market Value as at 30th September - 1.90

7.1.1 Company Number of Market Holdings Number of Market HoldingsShares Value as a % of Shares Value as a % of

Net Asset Net AssetRs. Value Rs. Value

Power & EnergyLaugfs Gass Company Plc - - 0.00% 31,000 1.09 25.12%

MANUFACTURINGSOFTLOGIC HOLDINGS - - 0.00% 55,000 0.82 18.97%

- - 0.00% 86,000 1.90 44.09%

7.2 Net Change in Unrealised Losses on Financial Assets - Held for Trading 2017 2016Rs.Mn Rs.Mn

Equity Securities - 0.04 Debt Securities - Government Treasury Bills - -

- 0.04

NAMAL IPO FUNDInterim Report 2017

2017 2016

All figures are provisional and unaudited. Where necessary comparative figures have been adjusted to confirmwith the changes in presentation in the current period.

There are no material Contingent Liabilities or contingent Assets which require disclosure in the financialstatements.

No circumstances have arisen since the Balance Sheet date, which would require adjustments or disclosure in theFinancial Statements.

Net Asset Value of a unit as at September 30 (Rs)

(Applicable to Units)

5

NOTES TO THE FINANCIAL STATEMENTSFor the six month period ended September

8. FINANCIAL ASSETS - LOANS AND RECEIVABLES

8.1. Repurchase Agreements 2017 2016Rs.Mn Rs.Mn

Commercial Bank - 2.10 - 2.10

9 Accrued Expenses

Fund Manager Payable 0.00 0.01 Trustee fee and Custodian fees Payable 0.02 0.02 Audit fees Payable 0.08 0.08 Other Payable 0.09 -

0.20 0.11

10 Investment Income

Dividend Income - 0.06

Interest onTreasury Bill Repurchase Agreement - 0.09 Savings 0.01 0.01

0.01 0.10

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CORPORATE INFORMATION

Trustee & Custodian Deutsche Bank AG86 ,Galle RoadColombo 03

Auditors Ernst & YoungChartered Accountants201, De Saram PlaceColombo 10

Bankers Deutsche Bank AG86, Galle RoadColombo 03

Lawyers F J & G De SaramAttorneys-at-Law & Notries Public216, De Saram PlaceColombo 10

Managers & Registrars National Asset Management Limited7, Glen Aber PlaceColombo 03

National Asset Management LimitedBoard of Directors (30th September 2017) Mr. Alexis Lovell Chairman

Mr. Indrajit Wickramasinghe DirectorMr. Palitha Gamage DirectorMr. Tyronne de Silva DirectorMr. Malinda Samaratunga DirectorMr. Wijenanada Dambawinne DirectorMr. Suren Madhanayake DirectorMr. Avancka Herat DirectorMs. Khoo Siew Bee Director

NAMAL IPO FUNDInterim Report 2017

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