20100225090924953_Half Yearly Acounts KSMF

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CONTENTS

Fund Information 2

Mission Statement 3

Report of the Directors of the Management Company 4

Trustee Report to the Unit Holders 5

Independent Auditors Report on Review of Condensed Interim Financial

Information to the Unit Holders of KASB Stock Market Fund 6

Condensed Interim Statement of Assets and Liabilities 7

Condensed Interim Income Statement (Un-audited) 8

Condensed Interim Statement of Comprehensive Income (Un-audited) 9

Condensed Interim Distribution Statement (Un-audited) 10

Condensed Interim Statement of Movement in Unit Holders Funds (Un-audited) 11

Condensed Interim Cash Flow Statement (Un-audited) 12

Notes to the Condensed Interim Financial Information (Un-audited) 13

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KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The H alf Year Ended Dec 31, 2009


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Management Company

KASB Funds Limited

Registered Office:

9th Floor, Trade Centre, I. I. Chundrigar

Road, Karachi-74200, Pakistan

Principal Office:11th Floor, Trade Centre, I. I. Chundrigar

Road, Karachi-74200, Pakistan

UAN: (92-21) 111 535 535

Fax: (92-21) 3263 9188

URL: www.kasb.com

Board of Directors of KASB Funds Limited

Mr. Robert John Richard Owen - Chairman

Ms. Naz Khan - Director & Chief Executive

Mr. Farid Arshad Masood - DirectorSyed Muham mad Reh manullah - Director

Chief Financial Officer

Mr. Muhammad lmran Khalil

Company Secretary

Mirza Mahmood ul Hasan

Audit CommitteeMr. Farid Arshad Masood - Chairman

Mr. Robert John Richard Owen - Member

Syed Muhammad Rehmanullah - Member

Trustee

Central Depository Company of Pakistan

Limited, CDC House, 99-B, Block B,

SMCHS, Main Shahra-e-Faisal, Karachi

Fund Rating - 4 star by PACRA(Ferbruary 2010)

Bankers to the Fund

KASB Bank Limited

Auditors

KPMG Taseer Hadi & Co. - Chartered

Accountants, First Floor, Shiekh Sultan TrustBuilding No. 2, Beaumont Road,

P.O.Box 8517, Karachi

Legal Advisor

Bawaney & Partners

Room No. 404, 4th Floor, Beaumont Plaza,

6-cl-10, Beaumont Road, Civil Lines,

Karachi-75530

RegistrarNoble Computer Services (Pvt.) Limited

Mezzanine Floor, House of Habib Building

(Siddiqsons Tower) 3-Jinnah Cooperative Housing

Society, Main Shahra-e-Faisal Karachi-75350

Distributors

KASB Funds Limited

KASB Bank Limited

KASB Securities LimitedIGI Investment Bank Limited

Atlas Capital Markets (Private) Limited

Standard Chartered Bank (Pakistan) Limited

Management Company Rating

Rated AM3+ by JCR-VIS

(May 2009)

FUND INFORMATION

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MISSION STATEMENT

KASB Stock Market Fund seeks to generate long-term capital

appreciation and income from a portfolio that is substantially

constituted of equity and equity related securities.

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KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The Half Year Ended De c 31, 2009


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REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANYFOR KASB STOCK MARKET FUND

For the half year ended December 31, 2009

The B oard of Directors of KASB F unds Limited (KFL or the Com pany), the Ma nagem ent Com pany ofKAS B Stock M arket Fund (KSM F or the Fund), is pleased to present the condense d interim financialinformation of the Fund for the half year ended D ecember 31 , 2009.

Investing Activities and Funds PerformanceDuring 1H FY10, key macroeconomic indicators depicted substantial recovery on multiple fronts includingsignificant decline in current acco unt deficit, improved b alance of payment p osition a nd co nsiderable fallin headline inflation. Coun trys foreign exchange reserves improved fur ther and crossed USD 15.2 bln dueto foreign inflows from IMF and other International Financial Institutions. While the countrys economystab i l i zes , s t ruc tu ra l p rob lems pers is t wh ich may h inder robus t fu tu re economic g rowth .

The equity market displayed volatile behavior during the first half of the financial year, the market remainedsubdued during the se cond quarter a fter recording healthy gains in the first quarter. On a n et basis, theKSE-30 index appreciated by 30.10% in the half year as volumes declined in the second quarter. NetForeign Portfolio Investment of U SD 287 m ln has been the driving force behind this bullish trend as foreigninvestors regained their risk appetite and have diversified their investmen ts into Pakistan g iven a rise inregional markets an d a steepe r discount offered by the KS E. Inclusion of Pakistan in the M SCI FrontierMarket Index, Moodys maintaining Pakistans credit rating at B3, and regular release of funds by IMF underthe standby agreem ent has a lso boosted foreign interest in the market, while reduction in policy rate by150bps over the period has also helped in shaping sentiment at the bourse.

While the benchmark KSE-30 posted a return of 30.10%, the Fund recorded a return of 19.44% for thesaid period thereby underperforming its benchm ark by10.66% due largely to the complete ma rk down o fa Sukuk held in the fund due to credit concerns.

The Fund earned a gross income of Rs. 86.382 mln during period under consideration while the net incomeof the Fund for the same period was Rs. 86.066 mln and the total net assets of the Fund stood at Rs.254.345 mln at the end of the period translat ing into a NAV per uni t of Rs. 39.38 (Par Rs. 50).

Future OutlookThe medium term economic outlook for the country appears positive as the economy is stabilizing withthe help o f IMF and o ther foreign donors inflows. However, structural reform s are critical for longer term

macro improvements in the e conomy. Interest rates also w ill largely depend up on inflationary pressuresas well as exchange rate consideration but a ceremonial 50 100 bps cut in the policy rate may be w itnessedin 2H FY10 a ssuming no m ajor price shock in commod ities.

The m arket has begun 2010 in an upbeat m ood. The m arket is stil l attractively priced and presents acompelling investment opportunity with forward PE of under 8x and some defensive plays offering doubledigit dividend yields. There is also a possibility of a promotion to the em erging markets categor y. However,developments in the ong oing military offensive in the tribal areas as we ll as the possible imposition of acapital gains tax may dampen market sentiment in the short term as investors adjust to new realities.

Acknowledgement

The Board of Directors of the Management Company thanks the Securities and Exchange Commissionof Pakistan and the State Bank of Pakistan for their valuable suppor t, assistance an d guidance. The B oardalso thanks the employees of the Manag ement C ompany a nd Trustee for their dedication and h ard workand the unit holders for their confidence in the managem ent.

For and on behalf of the Board

February 12, 2010 Naz KhanKarachi Chief Executive

4KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The H alf Year Ended Dec 31, 2009


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5

KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The Half Year Ended D ec 31, 2009

TRUSTEE REPORT TO THE UNIT HOLDERSKASB STOCK MARKET FUND

Report of the Trustee pursuant to Regulation 41(h) of the Non-Banking Finance Companiesand Notified Entities Regulations, 2008

The KASB Stock Market Fund (the Fund), an open-end fund was established under a trust deeddated January 09, 2007, executed between KASB Funds Limited, as the Management Company andCentral Depository Company of Pakistan Limited, as the Trustee.

In our opinion, the Management Company has in all material respects managed the Fund during theperiod from July 01, 2009 to December 31, 2009 in accordance with the provisions of the following:

(i) Limitations imposed on the investment powers of the Management Company under the

constitutive documents of the Fund;

(ii) The pricing, issuance and redemption of units are carried out in accordance with therequirements of the constitutive documents of the Fund; and

(iii) The Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003, the Non-Banking Finance Companies and Notified Entities Regulations, 2008 and the constitutivedocuments of the Fund.

Muhammad Hanif JakhuraChief Executive OfficerCentral Depository Company of Pakistan Limited

Karachi, February 18, 2010


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6KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The H alf Year Ended Dec 31, 2009

INDEPENDENT AUDITORS REPORT ON REVIEW OF CONDENSED INTERIMFINANCIAL INFORMATION TO THE UNIT HOLDERS OF KASB STOCK MARKET FUND

IntroductionWe have rev iewed the accompanying condensed in ter im statement of assets and l iab i l i t ies ofKASB Stock Market Fund (the Fund) as at 31 D ecember 2009 and the related condensed interimincome statement, condensed interim statement of comprehensive income, condensed interim distributionstatement, condensed interim statement of m ovement in unit holders funds and condensed interim cashflow statement together with the no tes forming part thereof for the six-months period ended 31 D ecember2009 (here-in-after referred to as the condensed interim financial inform ation). Mana geme nt Com panyis responsible for the preparation and p resentation o f this condensed interim financial informa tion inaccordance with approved accounting standards as ap plicable in Pakistan for Interim Financial Repor ting.Our responsibility is to express a conclusion on this condensed interim financial information based on

our review.

Scope of ReviewWe conducted our review in accordance with International Standard on Review Engagements 2410,Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review ofcondensed interim financial information consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other review procedures. A review issubstantial ly less in scope than an audit conducted in accordance with International Standards onAuditing and consequently does not enable us to obtain assurance that we would become aware of allsignificant m atters that might be iden tified in an au dit. Accordingly, we do not express an a udit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the accompanyingcondensed interim financial information is not prepared, in all material respects, in accordance w ith approvedaccounting standards as applicable in Pakistan for interim financial reporting.

Other mattersThe figures for the quarters ended 31 Decem ber 2009 and 3 1 Decem ber 2008 in the condensed interimincome statement and condensed interim statement of comprehensive income, condensed interim distributionstatement, condensed interim statement of movement in unit holders funds and condensed interimcash flow statement have not been reviewed an d we do not express a conclusion on them.

Date: 12 February 2010 KPMG Taseer Hadi & Co.

Chartered Accountants

Karachi Moneeza Usman Butt


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As at December 31, 2009

CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES

December 31 June 30Note 2009 2009

(Un-audited) (Audited)(Rupees in '000)

AssetsBank balances 6 21,287 22,605Receivable against sale of investments 1,987 4,198Investments 7 238,283 272,619Dividend and income receivable 1,199 2,435Advances, deposits and prepayments 3,772 3,821

Preliminary expenses and floatation costs 1,154 1,416Total assets 267,682 307,094

LiabilitiesPayable against purchase of investments 11,896 3,457Payable on redemption of units 9 1,465Payable to KASB Funds Limited - Management Company 416 537Payable to Central Depository Company of Pakistan Limited - Trustee 63 69Payable to Securities and Exchange Commission of Pakistan 135 303Accrued expenses and other liabilities 818 1,986Total liabilities 13,337 7,817

Contingent Liability 8

Net assets 254,345 299,277

Unit holders funds 254,345 299,277

(Number of units)

Number of units in issue 6,458,272 9,078,238

(Rupees)

Net asset value per unit 39.38 32.97

7


The annexed notes 1 to 11 form an integral part of this condensed interim financial information.

For KASB Funds Limited(Management Company)

Chief Executive Director


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CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)

For the six months and quarter ended December 31, 2009

IncomeCapital gain / (loss) on sale of investments 75,587 (38,505) 20,741 (5,548)Dividend income 4,999 7,944 1,343 4,794Income from sukuk certificates - 2,079 (1,282) 2,079Profit on bank deposits 2,054 2,185 1,048 293Unrealised ap preciation / (diminution) in fair value

of investme nts classified as 'at fair valuethrough profit or loss' - held for trading 7.4 3,742 (190,866) (16,434) (112,613)Total income 86,382 (217,163) 5,416 (110,995)

ExpensesRemuneration of KASB Funds Limited -

Management Company 3,915 5,110 1,701 2,238Remuneration of Central Depository Company

ofPakistan Limited - Trustee 355 370 177 177Annual fee - Securities and Exchange Commission of Pakistan 135 176 59 79

Transaction costs on securities 2,006 551 787 33Settlement and bank charges 146 33 88 3Legal and professional charges 239 45 188 24Fees and subscription 71 68 37 34Auditors' remuneration 318 320 139 168Printing and other expenses 61 81 31 51Amortisation of Preliminary expenses and

floatation costs 262 262 131 131Provision against non-performing investme nt 7.5.1 16,000 9,786 16,000 9,786Provision for doubtful income receivable - 2,866 - 2,866Total expenses 23,508 19,668 19,338 15,590

62,874 (236,831) (13,922) (126,585)Net realised element of income / (loss) and

capital gains / (losses) included in prices ofunits issued less those in units redeemed 23,192 8,568 (3,099) (4,526)

Net income / (loss) for the period 86,066 (228,263) (17,021) (122,059)


8KASB Stock MarketFund Half Yearly Report Condensed Interim Financial Information For The Half Year Ended Dec 31, 2009

Six months endedDecember 31

2009 2008

Quarter endedDecember 31

2009 2008

(Rupees in '000) (Rupees in '000)

Note




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(Rupees in '000)

9

CONDENSED INTERIM STATEMENT OF COMPREHENSIVEINCOME (UN-AUDITED)




Other comprehensive income for the period:

Net element of income and capital gains includedin prices of units issued less those in unitsredeemed - amount representing unrealisedappreciation / diminution - 310 - 310

Total comprehensive income / (loss) for the period 86,066 (227,953) (17,021) (121,749)


2009 2008


2009 2008


(Rupees in '000)




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2009 2008

(Rupees in '000)

10

CONDENSED INTERIM DISTRIBUTION STATEMENT (UN-AUDITED)



Accumulated loss brought forward (154,961) (14,306) (51,874) (120,510)

Net element of income and capital gains includedin prices of units issued less those in units

redeemed - amount representing unrealisedappreciation / diminution - 310 - 310

Net income / (loss) for the period 86,066 (228,263) (17,021) (122,059)86,066 (227,953) (17,021) (121,749)

Accumulated loss brought forward (68,895) (242,259) (68,895) (242,259)


2009 2008


(Rupees in '000)




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Net assets at beginning of the period 299,277 483,942 253,871 348,637

Issue of 1,650,568 units (2008: 2,722,363 units)and 1,052,401 units (2008: 12,015 units) for thesix months and quarter respectively 66,116 114,985 43,217 423

Redemption of 4,270,533 units (2008: 3,605,804units) and 702,550 units (2008: 313,451 units)for the six months and quarter respectively (173,922) (150,279) (28,821) (10,658)

(107,806) (35,294) 14,396 (10,235)

Element of (income) / loss and capital (gains) /losses included in prices of units issued lessthose in units redeemed:

-amount representing accrued (income) / lossand realised capital gains / (losses) - transferredto the Income Statement (23,192) (8,568) 3,099 (4,526)

-amount representing unrealised appreciationin fair value of investments - reported in othercomprehensive income - (310) - (310)

(23,192) (8,568) 3,099 (4,836)Unrealised diminution in fair value of

investments classified as 'available for sale'during the period 7.5 - (7,891) - (7,891)

Net income / (loss) available for distribution(excluding net unrealised appreciation/(diminution) in fair value of investmentsclassified as 'at fair value through profit orloss'- held for trading) 6,737 1,108 (21,328) (3,898)

Unrealised appreciation / (diminution) in fair

value of investme nts classified as 'at fairvalue through profit or loss'-held for trading 7.4 3,742 (190,866) (16,434) (112,613)

Capital gain / (loss) on sale of investments 75,587 (38,505) 20,741 (5,548)

Net element of income and capital gainsincluded in prices of units issued less thosein units redeemed - amount representingunrealised appreciation / diminution - 310 - 310

Net income / (loss) (including net element ofincome and capital gains included in pricesof units issued less those in units redeemed -amount representing unrealised appreciation /

diminution) 86,066 (227,953) (17,021) (121,749)

Net assets at end of the period 254,345 203,926 254,345 203,926


CONDENSED INTERIM STATEMENT OF MOVEMENT INUNIT HOLDERS FUNDS (UN-AUDITED)


11


(Rupees in '000)

Note

(Rupees in '000)


2009 2008


2009 2008




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CASH FLOWS FROM OPERATING ACTIVITIES


Adjustments for:Dividend income (4,999) (7,944) (1,343) (4,794)Profit on bank deposits (2,054) (2,185) (1,048) (293)

Unrealised (appreciation) / diminution in fair valueof investments classified as 'at fair value throughprofit or loss' - held for trading (3,742) 190,866 16,434 112,613

Provision against non-performing investment anddoubtful income receivable 16,000 12,652 16,000 12,652

Amortisation of preliminary expenses and floatationcosts 262 262 131 131

Net element of (income) / loss and capital (gains) /losses included in prices of units issued less thosein units redeemed (23,192) (8,568) 3,099 (4,526)

(17,725) 185,083 33,273 115,783

Decrease / (increase) in assetsReceivable against sale of investments 2,211 (3,815) 968 (3,959)Investments - net 22,078 14,135 (53,886) (46,544)Dividend and income receivable 8,289 7,978 4,073 4,387Advances, deposits and prepayments 49 (7) 1,312 9

32,627 18,291 (47,533) (46,107)

Increase / (decrease) in liabilitiesPayable against purchase of investments 8,439 (3,784) 7,413 -Payable on redemption of units (1,456) (1,034) 9 27Payable to KASB Funds Limited - Management

Company (121) (1,006) (107) (685)Payable to Central Depository Company of Pakistan

Limited - Trustee (6) (27) (7) 8Payable to Securities and Exchange Commission

of Pakistan (168) (247) 59 79Accrued expenses and other liabilities (1,168) 105 (6,214) (38)

5,520 (5,993) 1,153 (609)

20,422 197,381 (13,107) 69,067

Net cash inflow / (outflow) from operating activities 106,488 (30,882) (30,128) (52,992)

CASH FLOWS FROM FINANCING ACTIVITIESNet (payments) / receipts from sale and redemption

of units (107,806) (35,294) 14,396 (10,235)Net decrease in cash and cash equivalents during

the period (1,318) (66,176) (15,732) (63,227)Cash and cash equivalents at beginning of the

period 22,605 67,263 37,019 64,314

Cash and cash equivalents at end of the period 21,287 1,087 21,287 1,087


CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)


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KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The Half Year Ended D ec 31, 2009

(Rupees in '000) (Rupees in '000)


2009 2008


2009 2008




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1. LEGAL STATUS AND NATURE OF BUSINESSKASB Stock Market Fund ("KSMF", the "Fund") was established under a Trust Deed executedbetween KASB Funds Limited (KFL) as Management Company and Central DepositoryCompany of Pakistan Limited (CDC) as Trustee. The Trust Deed was executed on January9, 2007 and the Fund was approved by The Securities and Exchange Commission of Pakistan(SECP) on February 23, 2007 in accordance with the Non-Banking Finance Companies(Establishment and Regulation) Rules, 2003 (NBFC Rules).

The Management Company of the Fund has been licensed to undertake asset managementand investment advisory services as Non-Banking Finance Company under the NBFC Rulesissued by The SECP. The registered office of the Management Company is situated at 9th

Floor, Trade Centre, I. I.Chundrigar Road, Karachi, Pakistan. JCR-VIS has assigned managementquality rating of AM3+ to the Management Company and PACRA has assigned a 4 star ratingto the Fund.

KSMF is an open-end stock market fund and is listed on the Karachi Stock Exchange (Guarantee)Limited. Units are offered for public subscription on a continuous basis. The units are transferableand can be redeemed by surrendering them to the Fund at the option of the unit holder.

KSMF seeks to generate long term capital appreciation and income, from a portfolio that issubstantially constituted of equity and equity related securities. The Fund may also invest acertain portion of its corpus in debt and money market securities in order to meet liquidityrequirements from time to time.

Title of the assets of the Fund are held in the name of Central Depository Company of PakistanLimited as trustee of the Fund.

2. BASIS OF PRESENTATIONThis interim financial information has been prepared in condensed form in accordance withapproved accounting standards as applicable in Pakistan for interim financial reporting andis being submitted to the unit holders as required under Regulation 38 (g) of the NBFCRegulations.

This condensed interim financial information does not include all the information required inthe annual financial statements and should be read in conjunction with the Fund's financial

statements for the year ended June 30, 2009.

This condensed interim financial information is unaudited and has been reviewed by theauditors.

This condensed interim financial information comprises of the condensed interim statementof assets and liabilities as at December 31, 2009 and the related condensed interim incomestatement, condensed interim statement of comprehensive income, condensed interimdistribution statement, condensed interim statement of movement in unit holders' funds,condensed interim cash flow statement and notes thereto for the six months endedDecember 31, 2009.

The comparatives in the statement of assets and liabilities presented in the condensed interimfinancial information as at December 31, 2009 have been extracted from the audited financialstatements of the Fund for the year ended June 30, 2009.

This condensed interim financial information is presented in Pak Rupees, which is the Fund'sfunctional and presentation currency and has been rounded off to the nearest thousand rupees.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION(UN-AUDITED)


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3. ACCOUNTING POLICIESThe accounting policies and methods of computation followed in the preparation of thiscondensed interim financial information are the same as those applied in preparing the financialstatements for the year ended June 30, 2009 except that during the current period, InternationalAccounting Standard (IAS) 1 (Revised), Presentation of Financial Statements became effectivefrom annual periods beginning on or after January 1, 2009. The application of this standardhas resulted in certain increased disclosures only (Condensed Interim Statement ofComprehensive Income). Comparative information has also been re-presented so that it conformswith the revised standard. However, this change has no effect on the Fund's income for theperiod or prior periods.

4. ESTIMATES AND JUDGEMENTSThe preparation of condensed interim financial information requires management to makejudgements, estimates and assumptions that affect the application of accounting policies andthe reported amounts of assets and liabilities, income and expenses. Actual results may differfrom these estimates. The significant judgements made by the management in applyingaccounting policies and the key sources of estimation uncertainty were the same as thosethat applied to financial statements as at and for the year ended June 30, 2009.

5. FINANCIAL RISK MANAGEMENTThe Fund's financial risk management objectives and policies are consistent with that disclosedin the financial statements as at and for the year ended June 30, 2009.

6. BANK BALANCES December 31 June 302009 2009


In current accounts 14 4In deposit accounts 6.1 21,273 22,601

21,287 22,605

6.1 These deposit accounts carry mark-up at the rate of 5% to 12.5% per annum (June 30, 2009: 5%

to 12.5% per annum).

December 31 June 307. INVESTMENTS 2009 2009


At fair value through profit or loss - held for trading- Quoted equity securities 7.2 238,283 256,619

Available for sale- Debt securities 7.3 - 16,000

238,283 272,619

7.1 The cost of the above investments as at December 31, 2009 amounted to Rs. 266.683 million(June 30, 2009: Rs. 289.514 million).


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7.2 Quoted equity securities-at fair value through profit or loss - held for trading

15



(Rupees in '000)

----------------- Num ber of sh ares / certi f icates -----------------

Nam e of the investee company

Market valueas a

percentageof net assets

Marketvalue as atDecember31, 2009

Bonusissue

during theperiod

As at July1, 2009

Purchasesduring the

period

As atDecember31, 2009

Salesduring the

period

Par value aspercentageof issuedcapital ofinvesteecompany

Shares of listed companies- Fully paid ordinary shares of Rs. 10/- each unless stated otherwise

Commercial BanksAllied Bank Limited 503,200 627,671 - 1,035,892 94,979 5,578 2.19 0.01

Bank Alfalah Limited - 1,700,000 - 1,285,000 415,000 5,715 2.25 0.03Habib Bank Limited - 10,000 - 10,000 - - - -MCB Bank Limited 211,800 342,500 - 468,390 85,910 18,873 7.42 0.01Meezan Bank Limited - 95,000 - 95,000 - - - -NIB Bank Limited - 215,045 - 215,045 - - - -National Bank of P akistan - 88,825 - 727,500 160,325 11,923 4.69 0.01United Bank Limited 1,065 462,600 - 381,165 82,500 4,822 1.90 0.01

Oil & Gas Exploration CompaniesOil & Gas Development Company Limited 421,000 527,000 - 799,630 148,370 16,411 6.45 0.01Pakistan Oilfields Limited 177,000 252,836 - 363,336 66,500 15,346 6.03 0.03Pakistan Petroleum Limited - 279,400 21,780 195,500 105,680 20,036 7.88 0.01

Oil & Gas MarketingCompaniesAttock Petroleum Limited - 34,000 - 19,000 15,000 5,214 2.05 0.03Pakistan State Oil Company Limited 107,000 208,000 - 285,500 29,500 8,774 3.45 0.02

Investment Banks / Companies /Securities

Arif Habib Securities Limited 200,000 545,000 - 745,000 - - - -Jahangir Siddiqui & Co. Limited 56 477,500 - 312,556 165,000 4,962 1.95 0.02

Power Generation and DistributionHub Power Company Limited 7.2.1 534,500 951,731 - 797,100 689,131 21,418 8.42 0.06Nishat Chunian Power Limited - 100,000 - - 100,000 1,030 0.40 0.03

CementD.G. Khan Cement Company Limited - 455,000 - 295,000 160,000 5,210 2.05 0.01Lucky Cement Limited 269,700 390,000 - 539,700 120,000 7,949 3.13 0.04

Textile CompositeNishat Mills Limited - 188,677 - 188,677 - - - -Nishat Chunian Limited - 175,000 - 175,000 - - - -

InsuranceAdamjee Insurance Company Limited - 889,600 - 787,300 102,300 12,614 6.96 0.09Pakistan Reinsurance Company Limited 55,000 - 50,000 5,000 131 0.05 0.01

Paper & BoardPackages Limited 23,200 112,900 - 111,555 24,545 3,534 1.39 0.03

Technology & CommunicationPakistan Telecommunication Company

Limited A - 951,265 - 175000 776,265 13,701 5.39 0.01Eye Television Network 141,000 - - 141,000 - - - -

FertilizerEngro Chemicals Pakistan Limited 142,621 262,400 - 336,100 68,921 12,631 4.97 0.02

Fauji Fertilizer Company Limited 7.2.1 306,712 167,500 - 333,500 140,712 14,483 5.69 0.02Fauji Fertilizer Bin Qasim Limited 637,000 567,293 - 1,204,293 - - - -

ChemicalsColgate Palmolive (Pakistan) Limited 2,300 - - 2,300 - - - -Descon Oxychem Limited - 100,000 - 100,000 - - - -

Synthetic & RayonIbrahim Fibres Limited 351,500 736,188 - 501,845 585,843 21,454 8.43 0.19

MiscellaneousEcopack Limited 1,997,000 1,275,627 - 1,897,989 1,374,638 6,474 2.55 6.00

238,283


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- - - -- - -- - - -- - N u m b e r o f c e r t i f ic a t e s - - - -- - - -- - - --

N a m e o f t h e i n v e s te e c o m p a n y

( R u p e e s i n '0 0 0 )

O u t s t a n d i n gp r i n c i p a l

v a l u e a s ap e r c e n t a g e o f

t o t a l d e b t i s s u e

C a r r y i n gv a l u e a s a

p e r c e n t a g eo f n e t a s s e t s

C a r r y i n gv a l u ea s a t

D e c e m b e r3 1 , 2 0 0 9

P r o f i tr a t e( % )

A s a tJ u l y 0 1

2 0 0 9

P u r c h a s e sd u r i n g

t h e

p e r i o d

S a l e sd u r i n g

t h e

p e r i o d

A s a tD e c e m b e r

3 1 , 2 0 0 9

7.2.1 Investments include quoted equity securities with market value as at Decembe r 31, 2009 aggregatingto Rs. 19.617 million which have be en pledged w ith Na tional Clearing Com pany of Pakistan Limitedfor guaranteeing settlement of Fund 's trades in terms of C ircular No.11 d ated October 23, 2007issued by the SECP.

7.3 Debt securities - available for sale

7.3.1 This represents su kuk certif icates of N ew All ied Electronics Industries (Private) Limited (NA EIL).The investment is collateralised a gainst f irst pari passu ch arge ove r all present and future fixedassets (excluding land and building) and current assets of the company, irrevocable guaranteeof A+ rated financial institution for each upcom ing installment of sukuk and pe rsonal guaranteesof the sponsor ing d i rec to rs , as ment ioned in the o f fe r ing documents o f the ins t rument .

On D ecem ber 03, 2008, ow ing to financial diff icult ies, NAEIL h as defaulted on paym ent of mark-up am ounting to R s. 2.42 m i ll ion and the Fund has made provision accordingly. The F und hassuspende d further accruals of mark-up am ounting to Rs. 6.37 m ill ion ti ll Decem ber 31, 2009.OnFebruary 11, 2009 and M arch 20, 2009 the Fund received part ial payments am ounting to Rs.1.166 mi l l ion and Rs. 0.63 mi l l ion respect ively against the outstanding mark-up. MUFAP hasclassified such exposure as non-performing and its credit rating has been down graded in viewof its continuous defaults. During the period an a mou nt of Rs.16 m ill ion has been recogn ised asprovision in respect of non performing investm ent in l ight of Circular 1 of 2009 and provisioningpol icy of the Fund duly approved by the Bo ard of Directors of the Managem ent Com pany andrelated SECP circulars. Therefore, the investment has been ful ly provided as at December 31,2009. Management is cont inuously monitoring the Funds exposure to this investment and ismaking nece ssary efforts for the recovery of the am ount.

The above is without prejudice to the Fund's claim against the above compa ny for the ent i reexposure and unrecognised markup and o ther charges etc.

7.4 Net unrealised appreciation / (diminution) in fair value ofinvestment classified as at fair value through profit Six months endedor loss - held for trading December 31

2009 2008

----(Un-audited)----

Fair value of investments 238,283 151,734Less: Cost of investments (234,530) (355,598)

3,753 (203,864)

Net unrealised diminution / (appreciation) in fair value

of investments at the beginning of the period 742 44,793

Add: Realised on disposal during the period (753) (31,795)

(11) 12,998

3,742 (190,866)

New Allied Electronics Industries (Private) Limited - II 7.3.1 14.51 6,400 - - 6,400 - - 4.27

(Rupees in '000)


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7.5 Net unrealised appreciation / (diminution) in fair value of 2009 2008investments classified as available for sale ----(Un-audited)----

(Rupees in '000)

Fair value of investments - 40,600Less: Cost of investments (32,153) (58,277)

(32,153) (17,677)

Unrealised diminution / (appreciation) in fair value

of investments at the beginning of the pe riod 16,153 -Provision against non-performing investment 7.5.1 16,000 9,786

- (7,891)


17


KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The Half Year Ended Dec 31, 2009

7.5.1 This includes Rs.16 million in respect of Ne w Allied Electronics Indus tries (Private) Limited(refer note 7.3.1).

8. CONTINGENT LIABILITYThrough Finance A ct, 2008 an am endment w as m ade in section 2(f) of the Workers Welfare FundOrdinance, 1971 (the WWF Ordinance) whereby the definit ion of Industrial Establishment hasbeen m ade ap pl icable to any establ ishme nt to which West Pakistan Shop s and Establishment

Ordinance, 1969 ap plies. Ma nagem ent, based on a legal advice, is of a firm view that as C ollectiveInvestment Schem es are pap er entities and are not establishments. Accordingly, the WWF Ordinanceis not applicable and therefore no provision is required in the condensed interim financial inform ation.How ever, in a rem otely probable event, if the Collective Investment Sc hem es are con sidered asindustrial establishme nts, the imp act on the N AV per unit will be R e. 0.27 as of D ecem ber 31, 2009 .

Mu tual Funds Association of Pakistan (MUFAP), of which the Mana gem ent Com pany is a me mbe r,has fi led a constitutional petit ion in the High Court of Sindh (SHC) praying it to declare that theCol lect ive Investment Schemes are not establ ishments and as a result are not l iable to paycontr ibution to the W WF. The legal proceedings in respect of the aforementioned pet i tion arecurrently in progress.

There were no other contingencies and comm itmen ts outstanding as at Decem ber 31, 2009 andJune 30, 2009.

9. TAXATIONThe Fu nd's incom e is exempt from Incom e Tax as per clause (99) of part I of the Secon d Sched uleof the Income Ta x Ordinance, 2001 subject to the condition that not less than 90% of the accountingincome for the year as redu ced by capital gains whether real ised or unreal ised is distributedamongst the unit holders. Furthermore, as per regulation 63 of the Non-Ban king Finance Com paniesand Notified E ntities Re gulations, 2008, the fund is required to distribute 90 % of the net accoun tingincome other than unrea lized capital gains to the unit holders. The managem ent intends to distributeat least 90% of the income earned by the year end by this Fund to the u nit holders. Accordingly,no prov is ion for taxat ion has been made in th is condensed in ter im f inancia l in format ion.

10. TRANSACTIONS WITH CONNECTED PERSONS / RELATED PARTIESConnected persons / related part ies include KASB Funds Limited (the M anagement C ompany),KASB Bank L imi ted (the Hold ing Com pany of the Managem ent Compan y), KASB Secur i tiesLimi ted, KAS B M odaraba and New Hor izon Explorat ion and Product ion L imi ted (associatedcompanies of the Managem ent Company), other Funds managed by the Management Com pany


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10.1 Transactions

including KA SB Liquid Fund, KASB Balanced Fund, KASB Islamic Income Fund, KAS B C ash Fundand KA SB C apital Protected Gold Fund , Central Dep ository Compa ny of Pakistan Limited (trusteeof the Fund) and d i rectors and key management personnel of the Management Company.

Transactions with connected persons are in the normal course of business, at contracted ratesand terms determined in accordance w ith ma rket rates.

Rem uneration payable to the Manage men t Compa ny and the Trustee is determined in accordancewith the provisions of N BFC Regulations 2008 and the Trust Deed respectively.

Details of transactions with connected persons / related parties an d balances with them at period

end are as fol lows:


18



KASB Funds Limited - Management Company

Remuneration 3,915 5,110 1,701 2,238

Sales load 78 34 77 -Redemption from the Fund: 44,850 units (2008:

Nil units) and Nil units (2008: Nil units) for the

six months and quarter respectively 1,864 - - -

KASB Securities Limited - Brokerage house

Brokerage 10.3 242 60 131 6

Redemption from the Fund: Nil units (2008: 25,718

units) and N il units (2008: Nil units) for the six

months and quarter respectively - 950 - -

Additional units: 8,273 units (2008: 8,652 units)

and 4,159 units (2008: 4,159 units) for the six

months and quarter respectively 318 329 164 147

KASB Bank Limited

Profit accrued on bank deposits 2,054 2,183 1,048 291

Bank charges 4 2 3 -

Additional units: 10,111 units (2008: 10,574 units)and 5,083 units (2008: 5,083 units) for the six

months and quarter respectively 389 402 201 178

Central Depository Company of Pakistan Limited -

Trustee

Remuneration 355 370 177 177

CDS charges 51 19 20 3


2009 2008


2009 2008

(Rupees in '000)

------------------(Un-audited)------------------

(Rupees in '000)


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19



Directors and officers of the Management Company

Investment in the Fund : 2,735 un its (2008: 578

units) and 1,836 un its (2008: Nil units) for the six

months a nd quarter respectively 110 25 72 -

Redem ption from the Fun d: 13,124 units (2008:

111,314 u nits) and 4,692 units (2008: 41,959

units) for the six mo nths and quarter respectively 485 3,976 180 1,383

Conversion in the Fund: 174,331 units (2008:

107,784 units) and 10,114 units (2008: Nil units)

for the six months an d quarter resp ectively 6,766 4,077 416 -

Conversion out the Fund: 156,016 units (2008:

41,139 un its) and 35,415 units (2008: 17,774

units) for the six mo nths and quarter respectively 6,169 1,598 1,503 595

Switching in the Fu nd: 141,737 units (2008: Nil

units) and 122,874 units (2008: Nil units) for the

six months and quarter respectively 5,796 - 5,101 -

Switching out of the Fun d: 154,884 un its (2008:

Nil units) and 88,219 u nits (2008: Nil units) for

the six months an d quarter respectively 6,252 - 3,657 -

Transfer in the Fund: 3,084 units (2008: Nil units)

and Nil units (2008: Nil units) for the six monthsand quar ter respectively 106 - - -

Transfer out of the Fund: 3,084 units (2008: Nil

units) and Nil units (2008: Nil units) for the six

months a nd quarter respectively 106 - - -

(Rupees in '000)

------------------(Un-audited)------------------

(Rupees in '000)


2009 2008


2009 2008


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December 31 June 302009 2009

10.2 Balances (Un-audited) (Audited)(Rupees in '000)

KASB Funds Limited - Management Company

Payable to the Management Company 416 537

Units held: 44,868 units (June 30, 2009: 89,718 units) 1,767 2,958

KASB Liquid Fund

Receivable from KASB Liquid Fund - 68

KASB Islamic Income Fund

Payable to KASB Islamic Income Fund - 612

KASB Securities Limited - Brokerage house

Brokerage payable 4 14

Units held: 1,822,344 units (June 30, 2009: 1,814,071 units) 71,764 59,810

KASB Securities Limited Employees' Provident Fund


KASB Bank Limited

Profit receivable on bank deposits 349 220

Bank balance 10.4 21,219 22,537

Units held: 2,454,891 units (June 30, 2009: 2,444,780 units) 96,674 80,604

Central Depository Company of Pakistan Limited - Trustee

Payable to the Trustee 63 69

Security Deposit 100 100

Directors and officers of the Management Company


20



10.3 The am ount disclosed represents the amount of brokerage p aid to connected person and not thepurchase o r sale values of securities transacted through them . The purchase or sale values havenot been treated as transact ions w ith conne cted persons as ul t imate co unter-parties are notconnected persons.

10.4 The rate of return on this deposit account is 12.5% per annu m (June 30 , 2009: 12.5% per annum ).

11. DATE OF AUTHORISATION FOR ISSUE

This condensed interim financial information wa s authorised for issue on Februar y 12, 2010 bythe Board of Directors of the Managem ent Comp any.




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Documents

20100225090924953_Half Yearly Acounts KSMF