ABAMCO LIMITED MUSLIM COMMERCIAL FINANCIAL SERVICES (PVT.) LIMITED

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2 Management Company ABAMCO LIMITED Trustee MUSLIM COMMERCIAL FINANCIAL SERVICES (PVT.) LIMITED (A wholly owned subsidiary of Muslim Commercial Bank Limited)

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4 SYNPOSIS OF OF UTP ISLAMIC FUND Dated December 27, MANAGEMENT COMPANY ABAMCO Limited (ABAMCO) is the Management Company. It is the first asset management company in the private sector in Pakistan and has been registered with the Securities & Exchange Commission of Pakistan (SECP) as an investment adviser and an asset management company. ABAMCO is a subsidiary of Jahangir Siddiqui & Co. Limited. ABAMCO is presently managing the BSJS Balanced Fund Limited (BBF), Unit Trust of Pakistan (UTP), UTP Income Fund (UTP-IF), an open-end mutual fund, listed on the LSE and twelve ICP Mutual Funds (ICP Mutual Funds Lot A). The total net assets of the funds under the management of ABAMCO is Rs. 3.5 billion. 2. TRUSTEE Muslim Commercial Financial Services (Pvt.) Limited (MCFSL) a wholly owned subsidiary of Muslim Commercial Bank Limited is the Trustee. The Trustee will take into custody and under its control all the property of UTP Islamic Fund and hold it in trust for the Unit Holders. The Trustee will carry out the instruction of the Management Company in all matters including the investment and disposition of the Deposited Property, unless they are in conflict with the Trust Deed, the Offering Document and the SECP Rules. 3. OBJECTIVES The main objective of the UTP Islamic Fund is to provide an avenue of investment to those who want to invest their savings in such schemes, which are Shariah compliant. In addition the aim is to provide to the investors an optimum rate of return, reasonable safety of capital and to provide to the investors liquidity to join or leave the fund at their convenience. 4. SUBSCRIPTION TO UNITS AND REDEMPTIONS The Par Value of units is Rs 500/-. The Core Investors (please refer to paragraph 4.1 page 18 of the Offering Document) have invested at Par Value a sum of Rs 60 million for a period of two years from December Units are offered for public subscription during the Initial Period on Buiness Days from Friday, December 27, 2002 to Saturday, January 4, 2003 at Par Value. After the Initial Period, the units can then be purchased at their respective Offer Price and redeemed at their respective Redemption Price, which the Management Company shall announce on a weekly basis based on the Net Asset Value of Units. The Offer Price will include a Sales Load. 5. INVESTMENT STRATEGY UTP Islamic Fund will invest in a diversified portfolio of equity securities and instruments in accordance with the requirement of Shariah with a view to optimise returns balanced with risk. A Shariah Advisory Council, appointed by the Management Company with the approval of SECP, will advise the Management Company on Shariah compliance. 6. SHARIAH ADVISORY COUNCIL The Shariah Advisory Council will be composed of three persons, who must be experts on Shariah

5 and have good understanding of Finance. The Management Company shall appoint the members of the Shariah Advisory Council with the approval of SECP. Shariah Advisory Council will advise the Management Company on matters relating to Shariahcompliance and recommend general investment guidelines, consistent with the Shariah. The first Shariah Advisory Council is from the Aleemiyah Islamic Missionary University, and is composed of Mr. Wasiul Hasan Ansari, Chairman and Secretary, Prof. Maulana Abu-Faheem Anwarullah Bin Wali and Mr. Mustafa Fazil Ansari, Members. 7. RISKS OF INVESTING IN UTP ISLAMIC FUND The Fund invests in a portfolio of securities that are subject to varying degrees of risk such as: o Investments will initially be in the stock market. The investment exposure in each company may be upto fifteen percent of the net assets and each sector may be upto thirty percent of the net assets, resulting in the market fluctuations to have a higher impact on the prices of UTP Islamic Fund. o Investments in Term Finance Certificates will be on a profit and loss basis and there is a possibility that the net result from such investments may be a loss. o All Investments made by the UTP Islamic Fund will be made in adherence with the principles of Shariah. It is possible that the effect of Shariah guidelines placed on investments may result in the Fund performing differently to funds with similar objectives, but which are not subject to Shariah review. o The portion of the income that accrues in the Fund from non-shariah compliant sources (i.e. Haram income) will be distributed as Charity by the Fund on authorization by the Unit Holders. Such distributions shall lower the net amount available for distribution to the Unit Holders as dividends. o Prices of Units and the dividends paid may go down as well as up. Past performance does not necessarily indicate future performance. 8. REMUNERATION Management Company 1) Annual remuneration 3% per annum of average Net Assets of UTP Islamic Fund during the first five years and 2% per annum thereafter. 2) An additional performance bonus as provided in the Rules. Trustee Monthly remuneration based on an annual tariff not exceeding 0.50% per annum upto Rs 1 billion and 0.1% for amounts exceeding Rs 1 billion of the average Net Assets. Shariah Advisory Council 1) Remuneration to Secretary/ Member: Monthly remuneration of Rupees Ten Thousand. 2) Remuneration of Other Members: A meeting fee of Rupees Five Thousand per meeting. The payment to Custodian, will be made by the Trustee and the payment to Transfer Agent will be made by the Management Company and there will be no separate charge on the Deposited Property of the Fund.

6 UTP Islamic Fund will bear all cost/ expenses relating to transaction in investment, cost of borrowing taxes, audit fees, legal fees and one time Formation Cost not exceeding Rs 600,000. Investors investing in UTP Islamic Fund after the Initial Period will pay a Sales Load of 2% of NAV. This amount will be paid to the Management Company to meet the promotional expenses of UTP Islamic Fund, including payment to Distribution Companies. 9. DISTRIBUTION PROCEDURE AND CHANNELS The Distribution Companies will interface with and provide services to the Holders including receiving issue, redemption, transfer and pledge applications, conversion notices and applications for change in addresses. The Distribution companies of UTP Islamic Fund are ABAMCO Ltd, Jahangir Siddiqui & Co. Ltd (JSCL), Jahangir Siddiqui Investment Bank Ltd (JSIBL), Kontinental Consultants Inc., Muslim Commercial Bank Limited (MCB), PICIC Commercial Bank Limited, and The Bank of Khyber. 10. DIVIDENDS At least 90% of the income, excluding realised capital gains received by UTP Islamic Fund will be distributed annually, as dividend and the balance of income will be retained for re-investment. The Management Company will also distribute a portion of realised capital gains. It may be noted however that the income from capital gains varies from year to year, depending upon the situation prevailing in the stock market. 11. TAXATION The income of UTP Islamic Fund will be exempted from tax, as it will distribute at least 90% of the income of the year, amongst the Unit Holders as dividend. Also there will be no withholding tax in the income of UTP Islamic Fund under the Income Tax Ordinance Any balance in the credit of PLS Account with an Islamic Bank standing on 1 st Ramazan-ul-Mubarak will be subjected to a deduction of 2.5% Zakat. 12. TAXATION OF UNIT HOLDERS AND LIABILITY TO ZAKAT The information set forth below is included for general information purposes only. In view of the individual nature of tax consequences, each investor is advised to consult with his tax adviser with respect to the specific tax consequences to him of investing in UTP Islamic Fund. (i) Income Tax: Unit holders of UTP Islamic Fund will be subject to income tax on dividend income and withholding tax (excluding on portion of dividend paid out of capital gains). Public Company and Insurance Companies are subject to 5% income tax and withholding tax. Others are subject to 10% income tax and withholding tax. (ii) Tax Credit: Unit Holders shall be entitled to a tax credit under section 61 (1) and (2) of the Income Tax Ordinance, 2001 to be calculated on purchase of new units upto Rs 100,000/-. (iii) Zakat: Units held by resident Pakistani Unit Holders shall be subject to Zakat at 2.5% of the Par Value of Units under Zakat and Ushr Ordinance, 1980, (XVII of 1980), except those exempted under the said Ordinance.

7 13. LIST OF SERVICES FOR INVESTORS No upper limit to issue of units to a single investor. Units can be redeemed at the convenience of Unit Holder. Redemption proceeds to be paid within six Business Days. Units can be transferred. Units can be pledge as security to a third party. Units can be issued in certificated or non-certificated form. Nomination. Units can be issued with four joint Holders. Financial reporting. 14. WHO CAN INVEST IN UTP ISLAMIC FUND a. Citizens of Pakistan (for minors, below 18 years of age, by their guardians). b. Companies, corporate bodies, financial institutions, banks, partners of a firm and societies incorporated in Pakistan. c. Foreign nationals and companies incorporated outside Pakistan. d. Provident, Pension and Gratuity Funds. e. Insurance companies. f. Non Profit Institutions, funds, trusts, societies or other organizations. 15. INFORMATION GIVEN IN THIS RESPONSIBILITY OF MANAGEMENT COMPANY ABAMCO accepts the responsibility for the information contained in this Offering Document as being accurate at the date of publication. 16. DISCLAIMER All investments in mutual funds and securities are subject to market risks. Our target return/ dividend range cannot be guaranteed. UTP-Islamic Fund's unit price is neither guaranteed nor administered/ managed. It is based on the NAV, that may go up or down depending upon the factors and forces affecting the stock market. It is possible that the Shariah Guidelines placed on investments may result in the Fund performing differently to funds with similar objectives, but which are not subject to Shariah Review. Past performance is not necessarily indicative of future results.

8 TABLE OF CONTENTS Part Contents Page 1 Approval and Consent Approval of the Securities and Exchange Commission of Pakistan Filing of the Offering Document 1 2 Definitions 3 3 Constitution, Objectives and Policies Constitution Objectives and Investment Policy Trust Deed Duration Open ended Fund Units Initial Offer Transaction in Units after Initial Period Extraordinary Circumstances Risk Disclaimer Offering Document Information given in this Document, Responsibility of Management Company Organization and Management Core Investors Management Company Funds under Management Shariah Advisory Council Secretary to Shariah Advisory Council Shariah Compliance Auditor Trustee: Duties and Responsibilities Transfer Agent Distribution Companies Auditors Legal Advisors Bankers 32 5 Principal Features Features of Units to be offered Purchase and Redemption of Units Offer and Redemption Prices Suspension of Dealing, Queue System and Winding up Expenses of UTP Islamic Fund Dividends Taxation 37

9 Part Contents Page 6 Procedure for Purchase of Units Who can apply? Application Procedure Payment Joint Application Allotment (Issue) of Units Procedure for Redemption of Units Application Procedure Payment of Redemption Proceeds Joint Holders Partial Redemption Redemption Requests in Excess of 10% of Units in Issue 41 8 Transfer of Units Application Procedure Partial Transfer Verification of Transfer Application Form Service to Unit Holders Availability of Forms Transfer of Account Register of Unit Holders Closure of Register Information in the Register Account Statement Certificates Replacement of Certificates Pledge/ Charge/ Lien of Units Nomination Financial Reporting Income Distribution Accounting period Declaration of Dividend Determination of Distributable Income Charity Reinvestment of Dividend Payment of Dividend Payment through the Bank of Dividends/Redemption Proceeds Dispatch of Dividend Warrants Objectives and Investment Policy Investment Objectives Investment Policy Investment Restrictions Exception to Investment Restrictions Transactions with Connected Persons 53

10 Part Contents Page 12 Borrowing Policy Limit Exception Pledge Liability of Guarantees Trustee and Management Company Financial Information Auditors Certificate on Core Investors Investment in 55 Units of UTP Islamic Fund Auditors Certificate on Net Asset Value of Units in UTP Islamic Fund Formation Cost Termination of UTP Islamic Fund By the Management Company By the Securities and Exchange Commission of Pakistan Winding up Arbitration Authorized Branches of Distribution Companies Applications Forms 61

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12 Offering Document

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14 OF UTP- ISLAMIC FUND Dated December 27, 2002 (Managed by ABAMCO Limited, an asset management company registered under the Asset Management Companies Rules, 1995) Established in Pakistan by a Trust Deed, dated December 16, 2002 registered under the Trusts Act, 1882 (11 of 1882) between ABAMCO Limited, as the management company and Muslim Commercial Financial Services (Pvt.) Limited, as the trustee and authorized under Rule 10 of the Asset Management Companies Rules, 1995 Initial Period: On Business Days from Friday, December 27, 2002 to Saturday, January 4, 2003 during banking hours PART I APPROVAL AND CONSENT 1.1 Approval of the Securities and Exchange Commission of Pakistan The Securities and Exchange Commission of Pakistan (SECP) has authorized the offer of units of UTP Islamic Fund under Rule 10 of the Asset Management Companies Rules, 1995 (Rules). The SECP has approved this Offering Document, under Rule 12 of the Rules. It must be distinctly understood that in giving this approval, the SECP does not take any responsibility for the financial soundness of UTP Islamic Fund nor for the accuracy of any statement made or any opinion expressed in this Offering Document. Investors may realize that all investments involve risk. It should be clearly understood that the portfolio of UTP Islamic Fund is subject to market fluctuations and risks inherent in all such investments. The value of the units in UTP Islamic Fund may appreciate as well as depreciate, as well as the level of dividend declared by UTP Islamic Fund may go down as well as up. All Investments made by the UTP Islamic Fund will be made in adherence with the principles of Shariah. It is possible that the effect of Shariah Guidelines placed on investments may result in the Fund performing differently to funds with similar objectives, but which are not subject to Shariah Review. The provisions of the Trust Deed govern this Offering Document. It sets forth information about UTP Islamic Fund that a prospective investor should know before investing in any unit. Prospective investors should consult their stockbroker, bank manager, legal adviser or other financial adviser. 1.2 Filing of the Offering Document The Management Company has filed a copy of this Offering Document signed by the Chief Executive along with the documents (1) to (7) below with the SECP. Certified copies of these documents along 1

15 with documents (8) to (12) below can be inspected at the registered office of the Management Company or the place of business of the Trustee, at addresses provided in the paragraph 3.1 of this Offering Document. (1) Trust Deed (Deed) of UTP Islamic Fund dated December 16, 2002, between ABAMCO Limited, as the establisher and the management company and Muslim Commercial Financial Services (Pvt.) Limited, as the trustee; (2) Custodian Agreement between Muslim Commercial Bank Limited and Muslim Commercial Financial Services (Pvt.) Limited; (3) The Transfer Agent Agreement between ABAMCO Limited and Technology Trade (Pvt.) Limited; (4) Distribution Agreements between Muslim Commercial Financial Services (Pvt.) Limited and the following distributors; a) ABAMCO Limited, b) Jahangir Siddiqui & Co. Limited, c) Jahangir Siddiqui Investment Bank Limited, d) Kontinental Consultants Inc., e) Muslim Commercial Bank Limited, f) PICIC Commercial Bank Limited, g) The Bank of Khyber, (5) Shariah Advisory Council s letter dated December 3, 2002 certifying, that the provisions of the Trust Deed are Shariah compliant; (6) Shariah Advisory Council s letter dated December 18, 2002 certifying, that the provisions of the Offering Document are Shariah compliant; (7) Letter from Ford Rhodes Sidat Hyder & Co, Chartered Accountants, Auditors of UTP Islamic Fund, consenting to the issue of statements and reports appearing in Part XIII of this Offering Document; (8) The SECP s (formerly known as Corporate Law Authority) letter No 7(1)CF/AM/95-1, dated August 29, 1995, registering ABAMCO Limited as an asset management company together with the Certificate of Registration; (9) The SECP s letter No SC/MF-JD(R)/440/2002, dated November 27, 2002, approving the appointment of Muslim Commercial Financial Services (Pvt.) Limited as the trustee of UTP Islamic Fund; (10) The SECP s letter No SC/MF-JD(R)/442/2002, dated November 29, 2002, approving the appointment of Shariah Advisory Council; (11) The SECP s letter No.SC/MF-JD(R)/417/2002, dated November 18, 2002, authorizing UTP Islamic Fund; (12) The SECP s letter No. SC/MF-JD(R)/464/2002. dated December 20, 2002, approving this Offering Document. 2

16 PART II DEFINITIONS: All defined terms used in this Offering Document are those defined in the Trust Deed. Unless the context requires otherwise the following words or expressions shall have the meaning respectively assigned to them viz.: 2.1 Accounting Date means in case of the final Accounting Period, the date on which money required for the final distribution is transferred to the Distribution Account, and in any other case the thirtieth day of June in each year provided that the Management Company with the written consent of the Trustee, change such date to any other date. 2.2 Accounting Period means a period ending on and including an Accounting Date and commencing (in case of the first such period) on the date on which the Deposited Property is first paid or transferred to the Trustee and (in any other case) from the end of the preceding Accounting Period. 2.3 Account Statement means statement of transactions in Units in the folio of the Holder. 2.4 Administrative Plans means investment plans offered by Management Company, where such plans allow investors a focused investment strategy in any one or a combination of unit trust schemes managed on the Shariah-compliant basis by the Management Company and for which Trustee is appointed as the trustee. 2.5 AMC means Asset Management Company. 2.6 Auditor means the Auditor of the Trust appointed by the Management Company. 2.7 Authorized Branch means those branches of the Distributors authorized by the Management Company. 2.8 Authorized Investment means any Shariah compliant investment approved as such by the Shariah Advisory Council, from time to time, but does not include bearer security or any other security that would involve the assumption of unlimited or undeterminable liability. 2.9 Back-end Load means Sales Load deducted from the Net Asset Value in determining the Redemption Price Bai Mu ajjal means a contract in which the seller earns a profit margin on his purchase price and allows the buyer to pay the price at a future date in a lump sum or in installments Bai Salam means a contract in which advance payment is made for certain defined goods (other than gold, silver and currencies) to be delivered later on a fixed date Bank means a banking company licensed under the Banking Companies Ordinance, 1962 or any other regulation for the time being in force and will include an Islamic Bank Bank Accounts means accounts maintained with a Bank, the beneficial ownership of which rests in the Holder. 3

17 2.14 Business Day means a day on which Banks are open for business in Pakistan Certificate means the definitive certificate acknowledging the number of Units registered in the name of the Holder issued at the request of the Holder pursuant to the provisions of this Deed Charity means amount paid by Management Company out of the income of the Trust to a charitable/ welfare organization, in consultation with Shariah Advisory Council, representing income, which is Haram Companies Ordinance means the Companies Ordinance, 1984, as amended for time to time Connected Person shall have the same meaning as in the Rules Constitutive Document means the Trust Deed that is the principal document governing the formation, management or operation of the Trust Contingent Load means Sales Load payable on redemption of Units within a certain number of years from the date of purchase and/or at a rate decreasing for every year or period the Units are held Core Investors means the initial investors, who shall be required to subscribe to and to hold number of Units of Par Value of not less than Fifty Million Rupees (Rs 50,000,000) for the minimum two years from the date of payment in full of such Units Core Units shall mean such Units of the Trust that are issued to Core Investors with the condition that these are not redeemable for a period of two years from the date of issue. However, such Units are transferable with this condition and shall rank pari passu with all other Units save for this restriction. Any transfer of these Core Units, during the first two years of their issue, shall be affected only on the receipt by the Transfer Agent of a written acceptance of this condition by the transferee Custodian means a Bank that may be appointed by the Trustee with the approval of the Management Company to hold and protect the Deposited Property or any part thereof as custodian on behalf of the Trustee Deposited Property means the aggregate proceeds of the sale of all Units at Offer Price after deducting therefrom or providing thereout any applicable Sales Load and Duties and Charges and includes the Investment and all income, profit and other benefits arising therefrom and all cash and other assets movable or immovable and property of every description for the time being held or deemed to be held upon trust by the Trustee for the benefit of the Holders pursuant to this Deed but does not include any amount standing to the credit of the Distribution Account Distribution Account means the Bank Account, which may be current, saving or deposit account maintained by the Trustee in a Shariah Compliant account with an Islamic Bank approved by the Management Company in which the amount required for the distribution of income to the Holders shall be transferred. Income of this account, if any, will accrue to the benefit of the Trust Distributor/ Distribution Company means a company, firm or a Bank appointed by the Trustee with the approval and instructions of the Management Company for performing the Distribution Function and shall also include the Management Company itself, if it performs the Distribution Function. 4

18 2.27. Distribution Function mean with regard to: (a) (b) (c) (d) Receiving applications for issue of Units together with the aggregate Offer Price for Units applied for by the applicants; Issuing of receipts in respect of (a) above; Interfacing with and providing services to the Holders including receiving redemption applications, transfer applications, conversion notices and applications for change of address or issue of duplicate Certificates for immediate transmission, in accordance with the instructions given by the Management Company or the Trustee, to the Management Company or the Transfer Agent as appropriate; and Accounting to the Trustee for all (1) moneys received from the applicants for issuance of Units; (2) payments made to the Holders on redemption of Units; and (3) expenses incurred in relation to the Distribution Function "Dow Jones" means Dow Jones & Company Inc., who have developed an Islamic Market Index of Shariah compliant Investments, under the name of "Dow Jones Islamic Market Index", overseen by a specialized Shariah Board, consisting of prominent Muslim religious scholars Duties and Charges means in relation to any particular transaction or dealing all stamp and other duties, taxes, Government charges, brokerage, bank charges, transfer fees, registration fees and other duties and charges whether in connection with the constitution of the Deposited Property or the increase or decrease of the Deposited Property on the creation, issue, sale, transfer, redemption or purchase issue of Units or the sale or purchase of Investments or in respect of the issue, transfer, cancellation or replacement of a Certificate or otherwise which may have become or may be payable in respect of or prior to or upon the occasion of the transaction or dealing in respect of which such duties and charges are payable but do not include the remuneration payable to the Distribution Company or any commission charges or costs which may have been taken into account in ascertaining the Net Asset Value "Fatwa" means a religious decree made by the Shariah Advisory Council or a group of at least three Muftis (Islamic religious scholars qualified to make a religious decree) associated with Aleemiyah Islamic Missionary University, Karachi or any other credible Islamic institution Formation Cost means all preliminary and floatation expenses of the Trust including expenses in connection with authorization of the Scheme, execution and registration of the Constitutive Document, issue, circulation and publication of the Offering Document and all expenses incurred during the Initial Period Front-end Load means the Sales Load that is included in the Offer Price of Units Halal means anything permitted by the Shariah Haram means anything prohibited by the Shariah Holder or Unit Holder means the investors for the time being entered in the Register as owner of a Unit, including investors jointly so registered pursuant to the provisions of the Deed. 5

19 2.36 Initial Period or Initial Offering Period means a period determined by the Management Company not exceeding ninety days during which Units will be offered at the Initial Price in terms of the Offering Document Initial Price means the price per Unit during the initial offering period determined by the Management Company Investment means any Authorized Investment forming part of the Deposited Property Islamic Asset Management Company means an associate company of ABAMCO, which may take over the management of the Scheme after a period of two years from the date of subscription of Core Investors or earlier as may be decided by the Promoters with the approval of the SECP and manage the affairs of the Scheme and launch further Shariah Compliant Schemes Islamic Bank means a Bank having license as Scheduled Islamic Commercial Bank from State Bank of Pakistan or a Bank, which accepts deposits on profit and loss basis and will include all Banks or financial institutions, approved by Shariah Advisory Council for the purpose of Banking by the trust Istisna a means a contractual agreement for manufacturing goods and commodities, allowing cash payment in advance and future delivery or a future payment and future delivery Mudarabah means a form of partnership where one partner provides funds, while other provides expertise and management "Mudharib/ Mudarib" means a working partner, who provides entrepreneurship and management under a Mudarabah agreement as distinct from the sahib-al-mal who provides the finance Mufti means a Muslim interpreter and expounder of Islamic Laws, who is qualified from a credible religious institution Murabahah means a sale on mutually agreed profit. Technically it is a contract of sale in which the seller declares his cost and profit. As a financing technique, it involves a request by the client to the financer to purchase certain item for him, which is then sold to the client Musharakah means a relationship established under a contract by the mutual consent of the parties for sharing of profits and losses arising from a joint enterprise or venture. All providers of capital are entitled to participate in management, but not necessarily required to do so. The profit is distributed among the partners in pre-agreed ratios, while the loss is borne by each partner strictly in proportion to respective capital contributions Net Assets, in relation to the scheme, means the excess of assets over liabilities of the scheme, such excess being computed in the manner specified hereunder:-- a) A security listed on a stock exchange shall be valued at its sale price on such exchange on the date as of which it is valid, or if such exchange is not open on such date, then at its last sale price on the next preceding date on which such exchange was open and if no sale is reported for such date, the security shall be valued at an amount not higher than the closing asked price nor lower than the closing bid price. 6

20 b) an investment purchased and awaiting payment against delivery shall be included for valuation purposes as a security held, and the cash account of the Trust shall be adjusted to reflect the purchase price, including brokers commission and other expenses incurred in the purchase thereof but not disbursed as of the valuation date; c) an investment sold but not delivered pending receipt of proceeds shall be valued at the net sales price; d) the value of any dividends, bonus, shares or right which may have been declared on securities in the portfolio but not received by the Trust as of the close of business on the valuation date shall be included as assets of the Trust, if the security upon which such dividends, bonuses or rights were declared is included in the assets and is valued ex-dividend, ex-bonus or ex-rights as the case may be; e) a security not listed or quoted on a stock exchange shall be valued at investment price or its break up value as per last audited accounts, whichever is lower; f) profit/ mark up accrued on any Shariah compliant financing arrangement including but not limited to Murabahah, Musharakah, Bai Mu ajjal, Bai Salam, and Istisna a extended out of the Deposited Property of the Fund, shall be included in the asset of the Fund; g) any other income accrued (on Authorized Investments) up to the date on which computation was made shall also be included in the assets; and h) all liabilities, expenses, taxes and other charges due or accrued up to the date of computations which are chargeable under the Rules shall be deducted from the value of the assets Net Asset Value or "NAV" means per Unit value of the Trust arrived at by dividing the Net Assets by the number of Units outstanding No Load means no Sales Load payable on sale or redemption of Units Offer Price means the sum to be paid to the Trustee for issuance of one Unit, such price to be determined pursuant to sub paragraph 5.3 (c) of this Offering Document Offering Document means the prospectus, advertisement or other document, which contains the investment and distribution policy and all other information in respect of the Unit Trust, as, required by the Rules and is calculated to invite offers by the public to invest in the Unit Trust Ordinance means the Securities and Exchange Ordinance, 1969, as amended from time to time Par Value means the face value of a Unit that shall be Rupees Five Hundred (Rs. 500/-) or such other amount as may be determined by the Management Company in consultation with the Trustee from time to time Personal Law means the law of inheritance and succession as applicable to the individual Unit Holder Promoters means the Management Company and any other organization, which may join the 7

21 Management Company as a joint venture partner for the purpose of forming and managing the Islamic Asset Management Company Redemption Price means the amount to be paid to the relevant Holder of a Unit upon redemption of that Unit, such amount to be determined pursuant to sub paragraph 5.3 (d) of this Offering Document Register means the Register of the Holders kept pursuant to the Rules and the Deed Registrar Functions means the functions with regard to: (a) (b) (c) (d) (e) (f) (g) (h) (i) Maintaining the Register; Receiving application for redemption and transfer/ transmission of Units directly from Holder or legal representatives or through Distributor; Processing requests for issue, redemption, transfer and transmission of Units and requests for recording of pledge or for recording of changes in information/ particulars/ data with regard to the Holders; Issuing Account Statement to Holders; Issuing Certificates including Certificates in lieu of undistributed income to Holders; Dispatching income distribution warrants and allocating Units to Holders on re-investment of dividends as per Part X of this Offering Document; Canceling old Certificates on redemption or replacement; Maintaining record of lien/ pledge/ charge; and Keeping record of change of addresses/ other particulars of the Holders Reporting or Base Currency means Pakistani Rupee in which financial reports are presented Rules means the Asset Management Companies Rules, 1995, as amended from time to time Sales Load means the sales and processing charge or commission (excluding Duties and Charges) not exceeding five percent (5%) of the Net Asset Value, which may be included in the Offer Price of certain class of units or deducted from the Net Asset Value in order to determine the Redemption Price of certain classes of Units. The Management Company may apply different levels of Sales Load for different Plans under the Shariah Compliant Fund SECP means the Securities and Exchange Commission of Pakistan "Secretary to Shariah Advisory Council" means a person appointed as Secretary to Shariah Advisory Council, who must be a Mufti (an Islamic religious scholar qualified to make a religious decree) and conversant with modern business and banking conventions Shares, Preference Shares and Convertible Preference Shares means such instruments issued by companies, establishments or organizations, whose main business is Halal and whose financial structuring meets the criteria, laid down in the Offering Document. 8

22 2.65 Shariah means divine guidance as given by the Holy Qur an and the Sunnah of Prophet Muhammad (PBUH) and embodies all aspects of the Islamic faith, including beliefs and practice Shariah Advisory Council means a body of Islamic scholars, having knowledge of Islamic finance, appointed by the Management Company, with the clearance of SECP, to supervise and monitor the activities of the Scheme to ensure that all its activities comply with Shariah Stock Exchange means Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock Exchange or any other stock exchange registered under the Ordinance Subscription Day means every Business Day provided that the Management Company may with the prior written consent of the Trustee and upon giving not less than seven days notice in the newspapers declare any particular Business Day not to be a Subscription Day Supplementary Offering Document means a document issued by the Management Company, in consultation with the Trustee, after seeking approval of the SECP, describing the special features of an administrative plan offering investment in the Shariah Compliant Fund or a combination of the Shariah Compliant Fund and other schemes managed by the Management Company, or any amendments made to the Offering Document Term Finance Certificates means debts instruments issued on profit and loss sharing basis Transfer Agent means a company including a Bank that the Management Company shall appoint for performing the Registrar Functions Trust, Unit Trust Scheme or Shariah Compliant Fund means the Shariah Compliant Unit Trust constituted by the Trust Deed for continuous offers for sale of Units Unit means one undivided (Unit) share in the Trust Zakat has the same meaning as in Zakat and Ushr Ordinance (XVIII of 1980), Words and expressions used but not defined herein shall have the meanings assigned to them in the Rules. Words importing persons include corporations, words importing the masculine gender include the feminine gender, words importing singular include plural words, written or in writing include printing, engraving, lithography, or other means of visible reproduction. PART III CONSTITUTION, OBJECTIVES AND POLICIES 3.1 Constitution UTP Islamic Fund is constituted by a Trust Deed entered into at Karachi on December 16, 2002 between: (1) ABAMCO Limited (ABAMCO), a company incorporated under the Companies Ordinance 1984, with its registered office at , Chapal Plaza, Hasrat Mohani Road, Karachi-74000, as the establisher and the management company; and (2) Muslim Commercial Financial Services (Pvt.) Limited, a company incorporated under the Companies Ordinance 1984 and a wholly owned subsidiary of Muslim Commercial Bank Limited, with its registered office at 2 nd Floor, Adamjee House, I.I. Chundrigar Road, Karachi-74000, as the trustee, and with place of business as trustee of UTP Islamic Fund at 9 th Floor, Sheikh Sultan Trust Building No.1, Beaumont Road, Karachi

23 3.2 Objectives and Investment Policy The main objective of the UTP Islamic Fund is to provide an avenue of investment to those who want to invest their savings in such schemes, which are Shariah compliant. In addition the aim is to provide to the investors an optimum rate of return, reasonable safety of capital and to provide to the investors liquidity to join or leave the Fund at their convenience. The main focus of the UTP Islamic Fund is to provide an outlet to investors who want Riba-free rate of returns. Consistent with this policy, UTP Islamic Fund will invest in a diversified portfolio of securities and instruments in accordance with the requirement of Shariah with a view to optimise returns balanced with risk. A Shariah Advisory Council, appointed by the Management Company with the approval of SECP, will advise the Management Company on Shariah compliance. Please refer to Part XI of this Offering Document for details of the investment policy. 3.3 Trust Deed The Deed is subject to and governed by the Securities and Exchange Ordinance 1969 (Ordinance), Asset Management Companies Rules, 1995 (Rules), all other applicable laws and regulations and Guidelines of Islamic Shariah. The terms and conditions in the Deed and any supplemental deed shall be binding on each Unit Holder. The Trustee and the Management Company, acting together and with the approval of the SECP, shall be entitled by supplemental deed to modify, alter or add to the provision of the Deed on any of the following grounds, provided that the Shariah Advisory Council shall have certified that such alterations or/ and additions are Shariah compliant: 1) To the extent required to ensure compliance with any applicable laws and regulations or any amendment of such laws and regulations; 2) To enable the provisions of the Deed to be more conveniently or economically managed; 3) To enable the Units to be listed on a stock exchange; 4) Otherwise to the benefit of the Unit Holders; or 5) To comply with the provisions of Shariah; Provided that in case (2), (3) and (4) above, such alteration or addition shall not prejudice the interest of the Unit Holders; and that in any event, it shall not release the Trustee or the Management Company of their responsibilities. 3.4 Duration The duration of UTP Islamic Fund is perpetual. However it can be wound up by the SECP or by the Management Company on the occurrence of certain events as stated in Part XIV of this Offering Document under the heading Termination of UTP Islamic Fund. 10

24 3.5 Open ended Fund UTP Islamic Fund is an open-ended fund. It is divided into units having par value of Rupees Five Hundred each. All units and fractions thereof represent an undivided share in UTP Islamic Fund and rank pari- passu as to their rights in the net assets, earning and receipt of dividend and distributions. 3.6 Units UTP Islamic Fund shall offer units to investors on a continuing basis. There is no lower or upper limit set on the units to be issued to a single unit holder or on the total number of units to be issued to the public. Fraction of units will not be issued except on conversion of dividend, as per paragraph 10.5 (c) of this Offering Document. The units shall be fully paid before they are issued. The liability of unit holders shall be limited to the extent of unpaid amount (if any) on units. Unit Holders may redeem Units or fractions thereof for cash by redeeming to UTP Islamic Fund. Units are also transferable. Units will be issued in registered, uncertificated form and will be confirmed to investors by means of an Accounts Statement issued by Transfer Agent. Certificate(s) will be issued, if so requested by Unit Holder. 3.7 Initial Offer Units with a value of Rupees 60 million have been subscribed by Core Investors. Please see paragraph 4.1 for details. The Initial Offer is made during the Initial Period, which will be for eight Business Days and starts at the start of the banking hours on Friday, December 27, 2002 and shall close at the close of the banking hours on Saturday, January 4, During the Initial Period, Units will be offered at the Initial Price of Rupees Five Hundred (Rs. 500) per Unit. During the Initial Period the units cannot be redeemed. 3.8 Transaction in Units after Initial Period After the Initial Period, the public sale of units at Initial Price will be discontinued; the units can then be purchased at their respective Offer Price and redeemed at their respective Redemption Price. Please see paragraph 5.3 of this Offering Document. Fractional units may be issued only for purpose of reinvestment of dividends into units. The Management Company shall announce the Offer and Redemption Prices on a weekly basis at the end of the week for each following week. 3.9 Extraordinary Circumstances The sale and redemption of units may be suspended during extraordinary circumstances including closure of one or more stock exchanges on which any of the securities traded by UTP Islamic Fund are listed, the existence of a state of affairs, which in the opinion of the Management Company, constitutes an emergency as a result of which disposal of any investment would not be reasonably practicable or might seriously prejudice the interest of UTP Islamic Fund or of the unit holders, or a breakdown in the means of communication normally employed in determining the price of any investment, or when remittance of money can not be carried out in reasonable time and if the Management Company is of the view that it would be detrimental to the remaining unit holders to redeem units at a price determined in accordance with the Net Asset Value. The Management Company may announce a suspension or deferral of redemption in such cases. Such a measure shall be taken to protect the interest of the unit holders in the event of extraordinary circumstances or in the event redemption requests accumulate in excess of ten percent of the units in issue. In the event of a large 11

25 number of redemption requests accumulating, the requests may be processed in a queue system and under extreme circumstances the Management Company may decide to wind up the UTP Islamic Fund. Please refer to paragraph 5.4 of this Offering Document. Such suspension or queue system shall end on the day following the first Business Day on which the conditions giving rise to the suspension or queue system shall in the opinion of the Management Company have ceased to exist and no other condition under which suspension or queue system is authorized under the Deed exists. In case of suspension and invoking a queue system and end of suspension and queue system, the Management Company shall immediately notify the SECP and Trustee and publish the same in at least two daily newspapers, one in English and one in Urdu, having wide circulation in major cities of Pakistan Risk Investors may realize that all investments involve risk. It should be clearly understood that the portfolio of UTP Islamic Fund is subject to market fluctuations and risk inherent in all such investments. The value of the units in UTP Islamic Fund may appreciate as well as depreciate, as well as the level of dividend declared by UTP Islamic Fund may go down as well as up. Past performance does not necessarily indicate future performance. Investments will initially be in the stock market. The investment exposure in each company may be upto fifteen percent of the net assets and each sector may be upto thirty percent of the net assets, resulting in the market fluctuations to have a higher impact on the prices of UTP Islamic Fund. Investments in Term Finance Certificates will be on a profit and loss basis and there is a possibility that the net result from such investments may be a loss. Also all Investments made by the UTP Islamic Fund will be made in adherence with the principles of Shariah. It is possible that the effect of Shariah Guidelines placed on investments may result in the Fund performing differently to funds with similar objectives, but which are not subject to Shariah review. The portion of the income that accrues in the Fund from non-shariah compliant sources (i.e. Haram income) will be distributed as Charity by the fund on authorization of the Unit Holders. Such distributions shall lower the net amount available for distribution to the Unit Holders as dividends Disclaimer All investments in mutual funds and securities are subject to market risks. Our target return/ dividend range cannot be guaranteed. UTP-Islamic Fund's unit price is neither guaranteed nor administered/ managed. It is based on the NAV, that may go up or down depending upon the factors and forces affecting the stock market. It is possible that the Shariah Guidelines placed on investments may result in the Fund performing differently to funds with similar objectives, but which are not subject to Shariah review. Past performance is not necessarily indicative of future results Offering Document The provisions of the Trust Deed govern this Offering Document. It sets forth information about UTP Islamic Fund that a prospective investor should know before investing in any unit. Prospective investors should consult their stockbroker, bank manager, legal adviser or other financial adviser Information given in this Document, Responsibility of Management Company ABAMCO accepts the responsibility for the information contained in this Offering Document as being accurate at the date of publication. 12

26 PART IV ORGANIZATION AND MANAGEMENT 4.1 Core Investors The Core Investors of UTP Islamic Fund are the following, who have subscribed the amount as stated against their names. Core Investors No. of units Rupees Abbott Laboratories Pakistan Ltd.- Provident Fund 10,000 5,000,000 Abbott Laboratories Pakistan Ltd.- Staff Pension Fund 10,000 5,000,000 Central Depositary Company of Pakistan Ltd. - Employees Provident Fund 1, ,000 Century Paper & Board Mills Ltd. - Employees Gratiuty Fund 5,000 2,500,000 EFU General Insurance Ltd. 20,000 10,000,000 EFU Life Assurance Ltd. 20,000 10,000,000 Engro Chemical Pakistan Ltd. MPT Employees Pension Fund 10,000 5,000,000 Engro Chemical Pakistan Ltd. - Provident Fund 10,000 5,000,000 Mr. Illyas Katchi (Proprietor of Katchi Line) ,000 International General Insurance Company of Pakistan Ltd. 2,000 1,000,000 Jahangir Siddiqui Investment Bank Ltd. - Provident Fund ,000 ORIX Investment Bank Ltd. 10,000 5,000,000 ORIX Leasing Pakistan Ltd. - Employees Provident Fund 5,000 2,500,000 Pak Kuwait Investment Company (Pvt.) Ltd. 12,100 6,050,000 Pakistan PTA Management - Staff Gratuity Fund 2,000 1,000,000 Pakistan PTA Management - Staff Pension Fund 2,000 1,000,000 Pir Mohammad A. Kaliya ,000 Total 120,000 60,000,000 The Core Investors have agreed to hold their investment for a minimum period of two years from the date of payment in full of such units. The units can be transfered, subject to the condition that these must be held for the remaining period of two years. 4.2 Management Company (a) Shareholders: ABAMCO was incorporated on February 22, 1995 and registered as an investment adviser and an asset management company with the SECP (formerly the Corporate Law Authority) on February 27, 1995 and August 29, 1995 respectively. ABAMCO is presently managing thev BSJS Balanced Fund Limited (BBF), a close-end mutual fund, listed on the Karachi Stock 13

27 Exchange (KSE), Unit Trust of Pakistan (UTP), an open-end mutual fund, listed on the Lahore Stock Exchange (LSE), UTP Income Fund (UTP-IF), an open-end mutual fund, listed on the LSE and twelve ICP Mutual Funds (ICP Mutual Funds Lot A), listed on Karachi, Lahore and Islamabad Stock Exchanges whose management right was transferred to ABAMCO, under Management Right Transfer Agreement, dated October 11, 2002, among ABAMCO, Investment Corporation of Pakistan and Privatisation Commission. The total net assets of the funds under the management of ABAMCO is Rs. 3.5 billion. The paid up capital of ABAMCO is Rs 81.9 million, held by: 1) Jahangir Siddiqui & Co. Limited (JSCL) 54.98% 2) AIM Global Ventures, Inc., (AIM) 16.48% 3) International Finance Corporation (IFC) 10.99% 4) Muslim Commercial Bank Limited (MCB) 6.98% 5) Saudi Pak Commercial Bank Limited (SPCB) 5.50% 6) Mr. William H. Kleh % 7) Mr. M. Habib ur Rahman 0.12% 1) Jahangir Siddiqui & Co. Limited ( JSCL ) is a leading financial services organization. The firm s businesses are equity securities brokerage fixed income sales and trading, corporate finance, research, investment banking (via Jahangir Siddiqui Investment Bank Ltd.) and fund management (via ABAMCO Limited). The Pakistan Credit Rating Agency (Pvt.) Limited (PACRA), an affiliate of Fitch Credit Agency England, has assigned both the long term and short term ratings of the Company at AA (Double A) and A1+ (A one plus) respectively. Euromoney, in its Euromoney Awards for Excellence 2000 declared JSCL as the best domestic securities house. JSCL also received the KSE Top 25 Companies Award in As on September 30, 2002, JSCL had shareholders equity of Rs million making it the largest publicly listed securities firm in Pakistan. 2) AIM Global Ventures, Inc., a Cayman Island corporation, is an indirect wholly owned subsidiary of AMVESCAP PLC, the U.K. holding company created through the merger of AIM Management Company Group Inc. with and into a subsidiary of INVESCO PLC. AMVESCAP PLC is one of the world s largest asset managers, with approximately $400 billion in assets under management and with over 8,600 staff employed worldwide. Through its subsidiary companies AMVESCAP PLC conducts operations in North and South America, Europe, Asia and Australia, with major offices in Atlanta, New York, Houston, Toronto, London, Dublin, Paris, Frankfurt, Brussels, Milan, Tokyo, Hong Kong, Melbourne and Buenos Aires. AMVESCAP PLC and its subsidiaries provide investment management and related services to a wide range of institutional and retail clients, including regulated investment companies and other pooled investment schemes. These investment products are sold under the AIM and INVESCO brand names. AMVESCAP PLC is listed on the London Stock Exchange. 3) International Finance Corporation (IFC) is a member of the World Bank Group, which is a multilateral development organization, and is headquartered in Washington, DC. The IFC was established in 1956 and promotes sustainable private sector investment in developing countries as a way to bring economic development and to improve the quality of the lives of people in its developing member countries. IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. Its equity capital is provided by its member countries, both developed and developing, which collectively determine its policies and activities. 14