CONTENTS Corporate Information 1 Directors Report 2 Statement of Assets & Liabilities 4 Income Statement 5 Statement of Comprehensive Income 6 Distribution Statement 7 Statement of Movement in Unitholders Fund 8 Cash Flow Statement 9 Notes to the Financial Statements 10
Management Company CORPORATE INFORMATION Dawood Capital Management Limited 1500-A Saima Trade Towers I. I. Chundrigar Road, Karachi 74000 UAN: 111-DAWOOD (111-329-663) PABX: (92-21) 3227-1874 Fax: (92-21) 3227-1912 E-mail: dcm@firstdawood.com URL: www.edawood.com Board of Directors Mr. Feroze Sayeed-Ud-Deane Chairman (Nominee of BRRGM) Miss Tara Uzra Dawood Chief Executive Officer Mr. Iftikhar Hussain Director (Nominee of FDIBL) Mr. Nazimuddin Feroz Director (Nominee of BRRGM) AVM (Retd.) Zulfiqar Ahmed Shah Director (Nominee of FDIBL) Mr. S. Shabahat Hussain Director (Nominee of NIT) Mr. Gul Nawaz Director (Subject to SECP Approval) Chief Financial Officer Company Secretary Mr. Muhammad Saleem Munshi Mr. Tahir Mehmood Audit Committee AVM (Retd.) Zulfiqar Ahmed Shah Chairman Mr. Iftikhar Hussain Member Mr. Gul Nawaz Member Trustee Auditors Tax Advisor Legal Advisor Registrars Distributors Banker: Rating AMC Rating Central Depository Company of Pakistan Limited CDC House, 99-B, Block-B, S.M.C.H.S., Main Shahra-e-Faisal, Karachi-74400 Ph : (92-21) 111-111-500 Fax : (92-21) 34326020-23 M. Yousuf Adil Saleem & Co., Chartered Accountants Mazhar Associates A-1/E-3, Faiza Avenue Karachi. Bawaney & Partners 404, 4th Floor, Beaumont Plaza 6-cl-10 Beaumont Road, Karachi 75530 Telephone: (021) 3565-7658/9, 3565-7674 Fax: (021) 3565-7673 E-mail: bawaney@cyber.net.pk Gangjees Registrar Services (Pvt.) Limited Room # 516, 5th. Floor, Clifton Centre Kehkashan Clifton, Karachi Alfalah Securities (Pvt.) Ltd. Atlas Capital Market (Pvt.) Ltd. BMA Financial Services (Pvt.) Ltd. IGI Investment Bank Ltd. Al Baraka Islamic Bank Limited Dawood Islamic Bank Limied Habib Metropolitan Bank Limited Standard Chartered Bank (Pakistan) Limited PACRA: 4-Star PACRA : AM4+ 1
It gives me immense pleasure to present on behalf of the Board of Directors of Dawood Capital Management Limited ("DCM"/"the Company"), the Management Company of Dawood Islamic Fund ("DIF"/"the Fund"), the un-audited financial statements for the nine months period ended 2010. Economic Outlook Economic indicators continue to provide signals of stabilization and gradual recovery in the 3rd quarter of financial year 2009-10. The real GDP growth target for FY10, which is 3.5%, now appears to be achievable and appears to be stabilizing at 13%.after averaging at 20% last year, The State Bank of Pakistan, which is aiming to maintain a fiscal balance, has decided to keep the policy rate unchanged at 12.5% which has resulted in reduction of income on debt securities. The political backdrop has somewhat improved in first quarter 2010 with the government and main opposition steering away from direct confrontation and working towards constitutional reforms. This is a positive step towards a greater political stability in long-run and has been welcomed by investors. Debt Market Review In 2009, debt security prices showed substantial decline, as a result of severe economic and liquidity crises, but with successful restructuring of previously defaulting debt securities in cement sector, rising corporate earnings and greater transaction volumes has improved debt securities valuations which can be seen moving forward should corporate result improve in the months ahead. Equity Market Review The KSE-100 index levels rose 6.8% during the third quarter of the fiscal year. Improved domestic policy environment and strong policy discipline have eased foreign investors' risk concerns about Pakistan. In fact, it was mainly foreign fund support of $160m in the first quarter. Market volumes also showed a slight improvement of 8% on a QoQ basis and market capitalization was up by 11%. Steady economic recovery i.e, contained external deficits, subsidy elimination, relative stability in PKR, high foreign inflows coupled with healthy corporate earnings led to better market returns in 1QCY10. Going forward, market momentum is expected to build with improved corporate earnings and improved macroeconomic environment with the remaining hurdle now being tight monetary policy. Fund Performance DIRECTORS REPORT DIF is an Open end Shariah Compliant Asset Allocation Fund having investment strategy to provide investors with exposure to a range of Shariah based equity securities, debt securities and short-term Musharika placements. The Fund's strategy aims to not only preserve investors' capital but also to maximize the value of their investments while providing a stable stream of income. 2
The Fund's total income during the period increased to Rs. 41.45 million as compared to total income of Rs. 17.62 million in the same period last year. The total expenses were Rs. 71.43 million as opposed to Rs. 31.35 million, mainly due to increase in impairment loss of Rs. 39.99 million. The Net Assets Value (NAV) of DIF reached to Rs. 89.43 per unit from Rs. 92.23 per unit, as of 2010. The graphical illustration of DIF portfolio allocation as at 2010 as follows: Acknowledgement The Directors wish to express their gratitude to the Securities & Exchange Commission of Pakistan and other regulatory bodies for their valuable support, assistance and guidance during these times of recovery. The Board also thanks the employees of the Asset Management Company, the Trustee and Shariah Advisors for their dedication and hard work and the unit holders for their confidence in the Management. For and on behalf of the Board of Directors, April 27, 2010 Chairman Karachi. 3
Assets CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES AS AT MARCH 31, 2010 Notes 2010 (Unaudited) June 30, 2009 (Audited) Investments 5 230,115,021 323,891,898 Dividend and Profit Receivables 5,571,024 9,656,294 Deposit and Other Receivables 2,535,811 4,879,583 Preliminary Expenses and Floatation Cost 1,125,000 1,500,000 Bank Balances 47,988,535 49,577,351 Total Assets 287,335,391 389,505,126 Liabilities Payable to Management Company 1,394,712 1,943,204 Payable to Central Depository Company - Trustee 52,628 59,093 Annual Fee Payable to Securities and Exchange Commission of Pakistan 264,141 376,202 Payable to Unitholders Against Redemption 927,154 - Accrued Expenses and Other Liabilities 1,335,794 387,367 Total Liabilities 3,974,429 2,765,866 NET ASSETS 283,360,962 386,739,260 UNIT HOLDERS FUND (as per statement attached) 283,360,962 386,739,260 Number of Units in Issue 3,168,512 3,787,008 Net Assets Value per Unit (Face Value per Unit Rs.100/-) 89.43 102.12 The annexed notes form an integral part of these financial statements. For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 4
CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2010 Income Nine Months Ended Quarter Ended 2010 2009 2010 2009 Profit on Investment in Debt Securities 14,229,125 25,057,733 4,205,598 9,407,220 Profit on Musharika Placements 9,068,452 10,778,219 2,931,232 3,286,876 Capital Gain/(Loss) on Sale of Securities 5,131,683 (22,279,580) (2,542,615) (16,971,151) Dividend Income 2,598,730 2,981,986 737,388 98,700 Profit on Bank Balances 2,702,300 707,363 1,547,699 378,499 Element of Income and Capital Gains in Prices of Units Sold Less Those in Units Redeemed 3,682,781 2,687,327 4,677,269 2,415,248 Appreciation/(Diminution) on Remeasurement of Investments - 'At Fair Value through Profit or Loss' 4,037,205 (2,309,465) 2,894,056 18,568,177 Total Income 41,450,276 17,623,583 14,450,627 17,183,569 Expenses Impairment Loss (Note 5.2) 65,015,917 25,027,500 58,978,417 23,500,000 Remuneration to Management Company 4,170,650 4,479,915 1,261,973 1,372,434 Remuneration of Central Depository Company - Trustee 556,087 597,322 168,263 182,991 Annual Fee to Securities and Exchange Commission of Pakistan 264,141 278,415 79,925 77,771 Securities Transactions Costs 558,060 188,613 124,132 91,164 Auditors' Remuneration 251,250 233,750 62,500 86,250 Fee and Subscription 207,949 118,888 85,619 88,250 Amortization of Preliminary Expenses and Floatation Cost 375,000 375,000 125,000 125,000 Printing Charges 19,600 36,800 9,600 15,500 Bank Charges 14,026 14,324 3,475 4,675 Total Expenses 71,432,680 31,350,527 60,898,904 25,544,035 NET LOSS FOR THE PERIOD CARRIED FORWARD TO DISTRIBUTION STATEMENT (29,982,404) (13,726,944) (46,448,277) (8,360,466) Loss Per Unit - Basic and Diluted (9.46) (3.59) (14.66) (2.18) The annexed notes form an integral part of these financial statements. For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 5
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2010 Nine Months Ended Quarter Ended 2010 2009 2010 2009 Net Loss for the Period (29,982,404) (13,726,944) (46,448,277) (8,360,466) Other Comprehensive Income Element of Income and Capital Gain in Prices of Units Sold Less Those in Units Redeemed (3,682,781) (2,687,327) (4,677,269) (2,415,248) Unrealized Appreciation/(Diminution) on Remeasurement of Investments Classified as 'Available For Sale Investments' 8,146,055 (17,244,417) 5,485,829 21,485,270 Total Comprehensive (Loss)/Profit for the Period (25,519,130) (33,658,688) (45,639,717) 10,709,556 The annexed notes form an integral part of these financial statements. For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 6
CONDENSED INTERIM DISTRIBUTION STATEMENT (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2010 Nine Months Ended Quarter Ended 2010 2009 2010 2009 Undistributed Income/(Loss) Brought Forward 21,445,094 38,895,204 18,218,528 (5,800,538) Distribution of Bonus Units for the Year Ended June 30, 2009 19,692,439 39,329,264 - - 1,752,655 (434,060) 18,218,528 (5,800,538) Loss for the Period (29,982,404) (13,726,944) (46,448,277) (8,360,466) Undistributed Loss Carried Forward (28,229,749) (14,161,004) (28,229,749) (14,161,004) The annexed notes form an integral part of these financial statements. For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 7
CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS FUND (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2010 Net Assets at Beginning of the Period 386,739,260 433,846,373 369,054,814 376,082,112 Amount Received on Issue of Units 155,488 ( 2009 : 42,495) 15,520,998 4,192,300 5,828,482 299,000 Amount Paid on Redemption of Units 977,160 ( 2009 : 539,732) (93,380,166) (51,350,765) (45,882,617) (34,061,448) 308,880,092 386,687,908 329,000,679 342,319,664 Total Comprehensive (Loss)/Profit for the Period (25,519,130) (33,658,688) (45,639,717) 10,709,556 Net Assets at End of the Period 283,360,962 353,029,220 283,360,962 353,029,220 Represented By: Nine Months Ended Quarter Ended 2010 2009 2010 2009 Capital Account 316,851,243 382,775,204 316,851,243 382,775,204 Deficit on Re-Measurement of Securities (5,260,532) (15,584,980) (5,260,532) (15,584,980) Undistributed Loss Carried Forward (28,229,749) (14,161,004) (28,229,749) (14,161,004) 283,360,962 353,029,220 283,360,962 353,029,220 The annexed notes form an integral part of these financial statements. For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 8
CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2010 A. CASH FLOWS FROM OPERATING ACTIVITIES Net Loss for the Period (29,982,404) (13,726,944) (46,448,277) (8,360,466) Adjustments for: (Appreciation)/Diminution on Remeasurement of Investments - Held for Trading (4,037,205) 2,309,465 (2,894,056) (18,568,177) Element of Income and Capital Gains in Prices of Units Sold less those in Units Redeemed (3,682,781) (2,687,327) (4,677,269) (2,415,248) Amortization of Preliminary and Floatation Costs 375,000 375,000 125,000 125,000 Impairment Loss 65,015,917 25,027,500 58,978,417 23,500,000 27,688,527 11,297,694 5,083,815 (5,718,891) Decrease/(Increase) in Assets Investments 40,944,219 43,773,644 50,423,231 34,711,691 Dividend and Profit Receivable 4,085,270 (530,867) 3,043,110 1,723,263 Deposit and Other Receivable 2,343,772 (896,362) 9,204,597 (988,463) 47,373,262 42,346,415 62,670,938 35,446,491 Increase/(Decrease) in Liabilities Payable to Management Company (548,492) (2,123,870) (79,499) (1,531,386) Payable to Central Depositary Company - Trustee (6,465) (16,516) (10,600) (4,185) Annual Fee Payable to Securities and Exchange Commission of Pakistan (112,061) (152,250) 79,925 77,771 Payable to Unitholders Against Redemption 927,154-927,154 - Accrued Expenses and Other Liabilities 948,427 1,403,861 978,766 1,168,009 1,208,563 (888,775) 1,895,746 (289,791) Net Cash from Operating Activities 76,270,352 52,755,334 69,650,499 29,437,809 B. CASH FLOWS FROM FINANCING ACTIVITIES Nine Months Ended Net (Payments)/Receipts against Units (Redeemed)/Sold (77,859,168) (47,158,465) (40,054,135) (33,762,448) Net Cash Used in Financing Activities (77,859,168) (47,158,465) (40,054,135) (33,762,448) Net (Decrease)/Increase in Bank Balance During the Period (A + B) (1,588,816) 5,596,869 29,596,364 (4,324,639) Bank Balance at Beginning of Period 49,577,351 14,112,391 18,392,171 24,033,899 Bank Balance at End of the Period 47,988,535 19,709,260 47,988,535 19,709,260 The annexed notes form an integral part of these financial statements. Quarter Ended 2010 2009 2010 2009 For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 9
NOTES TO THE INTERIM FINANCIAL INFORMATION (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2010 1. LEGAL STATUS AND NATURE OF BUSINESS 1.1 Dawood Islamic Fund (DIF) was established under a Trust Deed executed on September 13, 2006 between Dawood Capital Management Limited (DCML) as Management Company and Central Depositary Company of Pakistan (CDC) as Trustee. The Securities and Exchange Commission of Pakistan (SECP) approved the appointment of Trustee and granted license to the Management Company of the Fund to act as an Asset Management Company. Registered office of the Management Company is situated at 1500-A, Saima Trade Towers, I.I.Chundrigar Road, Karachi, Pakistan. 1.2 DIF is an open-ended mutual fund and is listed on Karachi Stock Exchange. Units are offered for public subscription on a continuous basis. The units are transferable and can be redeemed by surrendering them to the Fund. 1.3 Principal activity of DIF is to make investment in equity and debts securities which are Shariah Compliant and approved by the Shariah Advisors. 1.4 Title to assets of the Fund are held in the name of Central Depository Company of Pakistan Limited as a Trustee of the Fund. 1.5 Asset Manager Rating (AMR) of 'AM 4+' (2008 : 'AM 4+') has been assigned to the Management Company and 4 star (2008) rating has been assigned to the Fund by Pakistan Credit Rating Agency (PACRA). 2. STATEMENT OF COMPLIANCE 2.1 These interim financial information have been prepared in accordance with requirements of the Non Banking Finance Companies and Notified Entities Regulations, 2008 (the Regulation), the Non Banking Finance Companies (Establishment and Regulation) Rules, 2003 (the Rules), the Trust deed, the Companies Ordinance, 1984 (the Ordinance), directives issued by the SECP and approved accounting standards as applicable in Pakistan. Approved Accounting Standards comprise of such International Financial Reporting Standards (IFRS) as are notified under the provisions of the Ordinance. Wherever, the requirements of the Regulations, the Rules, the Ordinance or directives issued by SECP differ with the requirements of these standards, the requirements of the Regulations, the Rules, the Ordinance and the said directives take precedence. 2.2 This interim financial information comprise of condensed interim statement of assets and liabilities, condensed interim income statement, condensed interim statement of comprehensive income, condensed interim distribution statement, condensed interim statement of movement in unit holders' fund and condensed interim cash flow statement together with the notes forming part thereof. The disclosures made in this interim financial information have, however, been limited based on the requirements of the International Accounting Standard 34, 'Interim Financial Reporting'. It does not include all the information and disclosures made in the annual published financial statement and should be read in conjunction with the financial statements of the Fund for the year ended June 30, 2009. Comparative information of the condensed interim income statement, condensed interim statement of comprehensive income, condensed interim distribution statement, condensed interim statement of movement in unit holders' fund and condensed interim cash flow statement for the nine months period ended 2009 and the three months period ended 2009 are un-audited and have been included to facilitate comparison. 10
2.3 These interim financial information are unaudited and are being circulated to the unit holders as required under the Regulations. 3. BASIS OF MEASUREMENT 3.1 Accounting Convention These interim financial information have been prepared under the historical cost convention except certain financial instruments which have been included at fair value. 3.2 Functional Currency These interim financial information are presented in Pak, which is the functional and presentation currency of the Fund. 4. SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted for the preparation of these interim financial information are the same as those applied in the preparation of the annual published financial statements of the Fund for the year ended June 30, 2009. The following new standards and amendments to existing standards are mandatory for the first time for the financial year beginning July 1, 2009: "IAS 1 (revised), Presentation of financial statements. The revised standard prohibits the presentation of items of income and expenses (that is, non-owner changes in equity ) in the statement of changes in equity. It requires non-owner changes in equity to be presented separately from owner changes in equity. All non-owner changes in equity are required to be shown in a performance statement, but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they are required to present a restated statement of financial position as at the beginning comparative period, in addition to the current requirement to present statements of financial position at the end of the current period and comparative period. The Fund has applied IAS 1 (revised) from July 1, 2009, and has elected to present two statements (the income statement and statement of comprehensive income). 5. INVESTMENTS Percentage June 30, of Total 2010 2009 Note Investment Held for Trading Investment in Listed Equity Securities 5.1 21% 47,465,599 29,634,518 Available-for-Sale Investment in Debt Securities 5.2 Quoted Debt Securities 1% 3,353,729 3,188,510 Un-Quoted Debt Securities 41% 94,295,693 206,068,870 97,649,422 209,257,380 Placements Certificates of Musharika/ Musharika Investment 5.3 37% 85,000,000 85,000,000 100% 230,115,021 323,891,898 11
5.1 Investment in Listed Equity Securities at Fair Value Through Profit and Loss - Held for Trading The holding are in the fully paid ordinary shares/certificates of Rs 10/- each. Name of Investee Opening at July 01, 2009 Number of Shares/Certificates Value of Shares/Certificates Percentage in Relation to Purchases Sales Number of Certificates Bouns/ Right Issue Closing at March 31, 2010 Cost Market Value Unrealised Appreciation / (Diminution) Investee Paid-up Capital Total Market Value of Investments % Oil & Gas Mari Gas Company Limited - 114,794 114,794 - - - - - - - National Refinery Pakistan Limited 25,500 54,930 15,900-64,530 14,680,111 11,646,374 (3,033,737) 0.01 24.54 Oil & Gas Development Corporation Limited - 375,000 375,000 - - - - - - - Pakistan Oilfields Limited 16,900 132,700 149,600 - - - - - - - Pakistan Petroleum Limited - 328,918 328,918 - - - - - - - Pakistan State Oil Company Limited - 25,000 25,000 - - - - - - - Shell Pakistan Limited 29,625 127,809 83,035-74,399 20,592,387 22,400,795 1,808,408 0.01 47.19 35,272,498 34,047,169 (1,225,329) 71.73 Chemicals Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) 43,500 596,175 639,675 - - - - - - - Fauji Fertilizer Company Limited 47,130 343,451 375,581-15,000 1,639,414 1,645,350 5,936 0.00 3.47 ICI Pakistan Limited - 104,588 89,588-15,000 2,556,912 2,431,800 (125,112) 0.00 5.12 4,196,326 4,077,150 (119,176) 8.59 Pharma and Bio Tech GlaxoSmithKline Pakistan Limited 34,100 66,484 19,444-81,140 9,304,918 7,870,580 (1,434,338) 0.00 16.58 Fixed Line Telecommunication Pakistan Telecommunication Company 67,000 316,155 313,155-70,000 1,496,923 1,470,700 (26,223) 0.00 3.10 Limited 2010 50,270,665 47,465,599 (2,805,065) 12
Opening at July 01, 2009 Purchased (Sold) Closing at 2010 Cost Market Value Unrealised (Loss)/Gain Return on Investment Percentage of Net Assets Percentage of Total Investment 5.2 Investment in Debt Securities Face Value of Rs.5,000/- Each Unless Otherwiswe Mentioned. Number of Certificates % Quoted Debt Securities Term Finance Certificates Invest Capital Investment Bank Limited (formerly Al-Zamin Leasing Modaraba- II) 2,000 - - 2,000 3,264,000 3,353,729 89,729 Min. Expected 1% 3.43 Profit 9.50% 3,264,000 3,353,729 89,729 Unquoted Debt Securities ** Sukuks Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) 7,000 - - 7,000 35,000,000 32,990,405 (2,009,595) K6+1.5 12% 33.78 Shahmurad Sugar Mills Limited * 37 - - 37 28,614,776 29,510,645 895,869 K6+2.25 10% 30.22 Pak Elektron Company Limited 8,000 - - 8,000 28,708,678 24,472,143 (4,236,535) K3+1.75 9% 25.06 Kohat Cement Limited 5,000 - - 5,000 24,150,000 2,415,000 (21,735,000) K6+1.8 1% 2.47 Maple Leaf Cement Factory Limited 9,815 - - 9,815 48,188,417 4,907,500 (43,280,917) K6+1.7 2% 5.03 House Building Finance Corporation Limited 5,000-5,000 - - - - K6+1 0% - New Allied Electronics Indus. (Pvt) Limited 1,000 - - 1,000 5,027,500 - (5,027,500) K3+2.2 0% - Sui Southern Gas Company Limited 3,000-3,000 - - - - K3+0.20 0% - 169,689,371 94,295,693 (75,393,678) 172,953,371 97,649,422 (75,303,949) Impairment Loss - - 70,043,417 172,953,371 97,649,422 (5,260,532) K = KIBOR * Face Value of Rs.1,000,000/- Impairment is done on Sukuks of New Allied Electronics for the year ended June 30, 2009 5,027,500 ** Impairment of Rs. 21,735,000/- is done on Sukuks of Kohat Cement Company Limited & Rs. 43,280,917/- on Sukuks of Maple Leaf Cement Factory Limited for the period ended 2010 T O T A L 65,015,917 70,043,417 Opening at July 01, 2009 Purchased (Matured) Closing at 2010 Date of Maturity Return on Investment Percentage of Net Assets 5.3 Certificates of Musharika/Musharika Investment % Invest Capital Investment Bank Limited (formerly Al-Zamin Leasing Modaraba) 50,000,000 - - 50,000,000 August 31, 2010 14.43% 17.65% BRR Guardian Modaraba 35,000,000 - - 35,000,000 2010 13.00% 12.35% 85,000,000 - - 85,000,000 13
6. TAXATION The Fund is exempt from income tax under clause 99 of part I to the Second Schedule of the Income Tax Ordinance 2001, subject to the condition that not less then 90 percent of its accounting income for the year, as reduced by the capital gains whether realized or unrealized, is distributed amongst its unit holders. The management intends to avail the tax benefit at the year end if there is profit. The Fund is also exempt from the provisions of section 113 (minimum tax) under clause 11 of Part IV of the Second Schedule to the Income Tax Ordinance, 2001 7. TRANSACTIONS WITH CONNECTED PERSONS/RELATED PARTIES The key connected persons/related parties relationships maintained by the Fund are those with the Management Company, directors, the Trustee, and its group companies/persons. The transactions with related parties are in the normal course of business, at contracted rates and terms determined in accordance with market rate or commercial rates. 2010 June 30, 2009 7.1 Amounts Outstanding as at the Period/Year End Dawood Capital Management Limited - Management Company Remuneration Payable 394,712 443,204 Preliminary Expenses Payable 1,000,000 1,500,000 Dawood Islamic Bank Limited Balance with the Bank 45,303,047 38,395,695 BRR Guardian Modaraba Placements 35,000,000 35,000,000 7.2 Amount of Transactions During the Period Dawood Capital Management Limited Nine Month Ended Quarter Ended 2010 2009 2010 2009 Management Company Remuneration 4,170,650 4,479,915 1,261,973 1,372,434 14
Directors and Officers of the Fund Nine Month Ended Quarter Ended 2010 2009 2010 2009 Number of Units Issued 470 - - - Value of Units Sold 47,900 - - - Number of Units Redeemed 470 - - - Value of Units Redeemed 48,338 - - - Dawood Islamic Bank Limited Number of Units Redeemed 408,318-408,318 - Value of Units Redeemed 36,071,384-36,071,384 - First Dawood Investment Bank Limited Return on Musharika Placements - 506,301 - - BRR Guardian Modaraba Return on Placements 3,576,164 3,878,603 1,121,917 1,380,822 8. DATE OF AUTHORIZATION FOR ISSUE These interim financial information have been approved and authorized for issue on April 27, 2010 by the Board of Directors of the Management Company. 10. FIGURES All figures have been rounded off to the nearest Rupee. For Dawood Capital Management Limited (Management Company) Director Chief Executive Officer Director 15