Half Yearly Acounts KSMF

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
KASB Stock Market Fund Half Yearly Report Condensed Interim Financial Information For The Half Year Ended Dec 31, 2009
1
FUND INFORMATION
Management Company Bankers to the Fund

KASB Funds Limited KASB Bank Limited
Registered Office:
9th Floor, Trade Centre, I. I. Chundrigar Auditors
Road, Karachi-74200, Pakistan KPMG Taseer Hadi & Co. - Chartered
Principal Office: Accountants, First Floor, Shiekh Sultan Trust
11th Floor, Trade Centre, I. I. Chundrigar Building No. 2, Beaumont Road,
Road, Karachi-74200, Pakistan P.O.Box 8517, Karachi
UAN: (92-21) 111 535 535
Fax: (92-21) 3263 9188 Legal Advisor
URL: www.kasb.com Bawaney & Partners
Room No. 404, 4th Floor, Beaumont Plaza,
Board of Directors of KASB Funds Limited 6-cl-10, Beaumont Road, Civil Lines,
Mr. Robert John Richard Owen - Chairman Karachi-75530
Ms. Naz Khan - Director & Chief Executive
Mr. Farid Arshad Masood - Director Registrar
Syed Muhammad Rehmanullah - Director Noble Computer Services (Pvt.) Limited
Mezzanine Floor, House of Habib Building
Chief Financial Officer (Siddiqsons Tower) 3-Jinnah Cooperative Housing
Mr. Muhammad lmran Khalil Society, Main Shahra-e-Faisal Karachi-75350
Company Secretary Distributors

Mirza Mahmood ul Hasan KASB Funds Limited
KASB Bank Limited
Audit Committee KASB Securities Limited
Mr. Farid Arshad Masood - Chairman IGI Investment Bank Limited
Mr. Robert John Richard Owen - Member Atlas Capital Markets (Private) Limited
Syed Muhammad Rehmanullah - Member Standard Chartered Bank (Pakistan) Limited
Trustee Management Company Rating

Central Depository Company of Pakistan Rated AM3+ by JCR-VIS
Limited, CDC House, 99-B, Block ‘B’, (May 2009)
SMCHS, Main Shahra-e-Faisal, Karachi
Fund Rating - 4 star by PACRA

(Ferbruary 2010)
2
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.
3
REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANY
FOR KASB STOCK MARKET FUND
For the half year ended December 31, 2009
The Board of Directors of KASB Funds Limited (“KFL” or “the Company”), the Management Company of
KASB Stock Market Fund (“KSMF” or “the Fund”), is pleased to present the condensed interim financial
information of the Fund for the half year ended December 31, 2009.
Investing Activities and Fund’s Performance

During 1H FY10, key macroeconomic indicators depicted substantial recovery on multiple fronts including
significant decline in current account deficit, improved balance of payment position and considerable fall
in headline inflation. Country’s foreign exchange reserves improved further and crossed USD 15.2 bln due
to foreign inflows from IMF and other International Financial Institutions. While the country’s economy
stabilizes, structural problems persist which may hinder robust future economic growth.
The equity market displayed volatile behavior during the first half of the financial year, the market remained
subdued during the second quarter after recording healthy gains in the first quarter. On a net basis, the
KSE-30 index appreciated by 30.10% in the half year as volumes declined in the second quarter. Net
Foreign Portfolio Investment of USD 287 mln has been the driving force behind this bullish trend as foreign
investors regained their risk appetite and have diversified their investments into Pakistan given a rise in
regional markets and a steeper discount offered by the KSE. Inclusion of Pakistan in the MSCI Frontier
Market Index, Moody’s maintaining Pakistan’s credit rating at B3, and regular release of funds by IMF under
the standby agreement has also boosted foreign interest in the market, while reduction in policy rate by
150bps 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 the
said period thereby underperforming its benchmark by 10.66% due largely to the complete mark down of
a 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 income
of 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 translating into a NAV per unit of Rs. 39.38 (Par Rs. 50).
Future Outlook
The medium term economic outlook for the country appears positive as the economy is stabilizing with
the help of IMF and other foreign donors inflows. However, structural reforms are critical for longer term
macro improvements in the economy. Interest rates also will largely depend upon inflationary pressures
as well as exchange rate consideration but a ceremonial 50 –100 bps cut in the policy rate may be witnessed
in 2H FY10 assuming no major price shock in commodities.
The market has begun 2010 in an upbeat mood. The market is still attractively priced and presents a
compelling investment opportunity with forward PE of under 8x and some defensive plays offering double
digit dividend yields. There is also a possibility of a promotion to the emerging markets category. However,
developments in the ongoing military offensive in the tribal areas as well as the possible imposition of a
capital 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 Commission
of Pakistan and the State Bank of Pakistan for their valuable support, assistance and guidance. The Board
also thanks the employees of the Management Company and Trustee for their dedication and hard work
and the unit holders for their confidence in the management.
For and on behalf of the Board
February 12, 2010 Naz Khan

Karachi Chief Executive
4
TRUSTEE REPORT TO THE UNIT HOLDERS
KASB STOCK MARKET FUND
Report of the Trustee pursuant to Regulation 41(h) of the Non-Banking Finance Companies
and Notified Entities Regulations, 2008
The KASB Stock Market Fund (the Fund), an open-end fund was established under a trust deed
dated January 09, 2007, executed between KASB Funds Limited, as the Management Company and
Central Depository Company of Pakistan Limited, as the Trustee.
In our opinion, the Management Company has in all material respects managed the Fund during the
period 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 the
requirements 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 constitutive
documents of the Fund.
Muhammad Hanif Jakhura

Chief Executive Officer
Central Depository Company of Pakistan Limited
Karachi, February 18, 2010
5
INDEPENDENT AUDITORS’ REPORT ON REVIEW OF CONDENSED INTERIM
FINANCIAL INFORMATION TO THE UNIT HOLDERS OF KASB STOCK MARKET FUND
Introduction
We have reviewed the accompanying condensed interim statement of assets and liabilities of
KASB Stock Market Fund (“the Fund”) as at 31 December 2009 and the related condensed interim
income statement, condensed interim statement of comprehensive income, condensed interim distribution
statement, condensed interim statement of movement in unit holders’ funds and condensed interim cash
flow statement together with the notes forming part thereof for the six-months period ended 31 December
2009 (here-in-after referred to as the “condensed interim financial information”). Management Company
is responsible for the preparation and presentation of this condensed interim financial information in
accordance with approved accounting standards as applicable in Pakistan for Interim Financial Reporting.
Our responsibility is to express a conclusion on this condensed interim financial information based on
our review.
Scope of Review
We 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 of
condensed interim financial information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
condensed interim financial information is not prepared, in all material respects, in accordance with approved
accounting standards as applicable in Pakistan for interim financial reporting.
Other matters
The figures for the quarters ended 31 December 2009 and 31 December 2008 in the condensed interim
income statement and condensed interim statement of comprehensive income, condensed interim distribution
statement, condensed interim statement of movement in unit holders’ funds and condensed interim
cash flow statement have not been reviewed and we do not express a conclusion on them.
Date: 12 February 2010 KPMG Taseer Hadi & Co.

Chartered Accountants
Karachi Moneeza Usman Butt
6
CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIES
As at December 31, 2009
December 31 June 30
Note 2009 2009
(Un-audited) (Audited)
(Rupees in '000)
Assets
Bank balances 6 21,287 22,605
Receivable against sale of investments 1,987 4,198
Investments 7 238,283 272,619
Dividend and income receivable 1,199 2,435
Advances, deposits and prepayments 3,772 3,821
Preliminary expenses and floatation costs 1,154 1,416
Total assets 267,682 307,094
Liabilities
Payable against purchase of investments 11,896 3,457
Payable on redemption of units 9 1,465
Payable to KASB Funds Limited - Management Company 416 537
Payable to Central Depository Company of Pakistan Limited - Trustee 63 69
Payable to Securities and Exchange Commission of Pakistan 135 303
Accrued expenses and other liabilities 818 1,986
Total 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
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
7
CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)
For the six months and quarter ended December 31, 2009
Six months ended Quarter ended

December 31 December 31
Note 2009 2008 2009 2008
(Rupees in '000) (Rupees in '000)
Income
Capital gain / (loss) on sale of investments 75,587 (38,505) 20,741 (5,548)
Dividend income 4,999 7,944 1,343 4,794
Income from sukuk certificates - 2,079 (1,282) 2,079
Profit on bank deposits 2,054 2,185 1,048 293
Unrealised appreciation / (diminution) in fair value
of investments classified as 'at fair value
through 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)
Expenses
Remuneration of KASB Funds Limited -
Management Company 3,915 5,110 1,701 2,238
Remuneration of Central Depository Company
of Pakistan Limited - Trustee 355 370 177 177
Annual fee - Securities and Exchange
Commission of Pakistan 135 176 59 79
Transaction costs on securities 2,006 551 787 33
Settlement and bank charges 146 33 88 3
Legal and professional charges 239 45 188 24
Fees and subscription 71 68 37 34
Auditors' remuneration 318 320 139 168
Printing and other expenses 61 81 31 51
Amortisation of Preliminary expenses and
floatation costs 262 262 131 131
Provision against non-performing investment 7.5.1 16,000 9,786 16,000 9,786
Provision for doubtful income receivable - 2,866 - 2,866
Total 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 of
units 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)

8
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE
INCOME (UN-AUDITED)

2009 2008 2009 2008
Other comprehensive income for the period:
Net element of income and capital gains included

in prices of units issued less those in units
redeemed - amount representing unrealised
appreciation / diminution - 310 - 310
Total comprehensive income / (loss) for the period 86,066 (227,953) (17,021) (121,749)

9
CONDENSED INTERIM DISTRIBUTION STATEMENT (UN-AUDITED)

2009 2008 2009 2008
Accumulated loss brought forward (154,961) (14,306) (51,874) (120,510)
Net element of income and capital gains included

in prices of units issued less those in units
redeemed - amount representing unrealised
appreciation / diminution - 310 - 310
86,066 (227,953) (17,021) (121,749)
Accumulated loss brought forward (68,895) (242,259) (68,895) (242,259)

10
CONDENSED INTERIM STATEMENT OF MOVEMENT IN
UNIT HOLDERS’ FUNDS (UN-AUDITED)

Note 2009 2008 2009 2008
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 the
six months and quarter respectively 66,116 114,985 43,217 423
Redemption of 4,270,533 units (2008: 3,605,804

units) 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 less
those in units redeemed:
-amount representing accrued (income) / loss

and realised capital gains / (losses) - transferred
to the Income Statement (23,192) (8,568) 3,099 (4,526)
-amount representing unrealised appreciation
in fair value of investments - reported in other
comprehensive 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 investments
classified as 'at fair value through profit or
loss'- held for trading) 6,737 1,108 (21,328) (3,898)
Unrealised appreciation / (diminution) in fair

value of investments classified as 'at fair
value 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 gains

included in prices of units issued less those
in units redeemed - amount representing
unrealised appreciation / diminution - 310 - 310
Net income / (loss) (including net element of

income and capital gains included in prices
of 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

11
CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)

2009 2008 2009 2008
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 value
of investments classified as 'at fair value through
profit or loss' - held for trading (3,742) 190,866 16,434 112,613
Provision against non-performing investment and
doubtful income receivable 16,000 12,652 16,000 12,652
Amortisation of preliminary expenses and floatation
costs 262 262 131 131
Net element of (income) / loss and capital (gains) /
losses included in prices of units issued less those
in units redeemed (23,192) (8,568) 3,099 (4,526)
(17,725) 185,083 33,273 115,783
Decrease / (increase) in assets

Receivable 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 4,387
Advances, deposits and prepayments 49 (7) 1,312 9
32,627 18,291 (47,533) (46,107)
Increase / (decrease) in liabilities

Payable against purchase of investments 8,439 (3,784) 7,413 -
Payable on redemption of units (1,456) (1,034) 9 27
Payable to KASB Funds Limited - Management
Company (121) (1,006) (107) (685)
Payable to Central Depository Company of Pakistan
Limited - Trustee (6) (27) (7) 8
Payable to Securities and Exchange Commission
of Pakistan (168) (247) 59 79
Accrued 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 ACTIVITIES

Net (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
12
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
(UN-AUDITED)
1. LEGAL STATUS AND NATURE OF BUSINESS

KASB Stock Market Fund ("KSMF", the "Fund") was established under a Trust Deed executed
between KASB Funds Limited (KFL) as Management Company and Central Depository
Company of Pakistan Limited (CDC) as Trustee. The Trust Deed was executed on January
9, 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 management
and investment advisory services as Non-Banking Finance Company under the NBFC Rules
issued 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 management
quality rating of AM3+ to the Management Company and PACRA has assigned a 4 star rating
to 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 transferable
and 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 is
substantially constituted of equity and equity related securities. The Fund may also invest a
certain portion of its corpus in debt and money market securities in order to meet liquidity
requirements from time to time.
Title of the assets of the Fund are held in the name of Central Depository Company of Pakistan
Limited as trustee of the Fund.
2. BASIS OF PRESENTATION
This interim financial information has been prepared in condensed form in accordance with
approved accounting standards as applicable in Pakistan for interim financial reporting and
is being submitted to the unit holders as required under Regulation 38 (g) of the NBFC
Regulations.
This condensed interim financial information does not include all the information required in
the 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 the
auditors.
This condensed interim financial information comprises of the condensed interim statement
of assets and liabilities as at December 31, 2009 and the related condensed interim income
statement, condensed interim statement of comprehensive income, condensed interim
distribution statement, condensed interim statement of movement in unit holders' funds,
condensed interim cash flow statement and notes thereto for the six months ended
December 31, 2009.
The comparatives in the statement of assets and liabilities presented in the condensed interim
financial information as at December 31, 2009 have been extracted from the audited financial
statements of the Fund for the year ended June 30, 2009.
This condensed interim financial information is presented in Pak Rupees, which is the Fund's
functional and presentation currency and has been rounded off to the nearest thousand rupees.
13
(UN-AUDITED)
3. ACCOUNTING POLICIES
The accounting policies and methods of computation followed in the preparation of this
condensed interim financial information are the same as those applied in preparing the financial
statements for the year ended June 30, 2009 except that during the current period, International
Accounting Standard (IAS) 1 (Revised), Presentation of Financial Statements became effective
from annual periods beginning on or after January 1, 2009. The application of this standard
has resulted in certain increased disclosures only (Condensed Interim Statement of
Comprehensive Income). Comparative information has also been re-presented so that it conforms
with the revised standard. However, this change has no effect on the Fund's income for the
period or prior periods.
4. ESTIMATES AND JUDGEMENTS

The preparation of condensed interim financial information requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expenses. Actual results may differ
from these estimates. The significant judgements made by the management in applying
accounting policies and the key sources of estimation uncertainty were the same as those
that applied to financial statements as at and for the year ended June 30, 2009.
5. FINANCIAL RISK MANAGEMENT

The Fund's financial risk management objectives and policies are consistent with that disclosed
in the financial statements as at and for the year ended June 30, 2009.
6. BANK BALANCES December 31 June 30

2009 2009
(Rupees in '000)
In current accounts 14 4
In 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 30
7. INVESTMENTS 2009 2009
(Rupees in '000)
‘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).
14
(UN-AUDITED)
7.2 Quoted equity securities-‘at fair value through profit or loss’ - held for trading
----------------- Number of shares / certificates ----------------- Par value as
Market Market value percentage
Bonus value as at as a of issued
Name of the investee company Purchases Sales As at
As at July issue percentage capital of
during the during the December December
1, 2009 during the 31, 2009 of net assets investee
period period 31, 2009
period company
Shares of listed companies (Rupees in '000)

- Fully paid ordinary shares of Rs. 10/- each unless stated otherwise
Commercial Banks
Allied 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 0.03
Habib Bank Limited - 10,000 - 10,000 - - - -
MCB Bank Limited 211,800 342,500 - 468,390 85,910 18,873 7.42 0.01
Meezan 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 0.01
United Bank Limited 1,065 462,600 - 381,165 82,500 4,822 1.90 0.01
Oil & Gas Exploration Companies
Oil & Gas Development Company Limited 421,000 527,000 - 799,630 148,370 16,411 6.45 0.01
Pakistan Oilfields Limited 177,000 252,836 - 363,336 66,500 15,346 6.03 0.03
Pakistan Petroleum Limited - 279,400 21,780 195,500 105,680 20,036 7.88 0.01
Oil & Gas MarketingCompanies
Attock Petroleum Limited - 34,000 - 19,000 15,000 5,214 2.05 0.03
Pakistan 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 Distribution
Hub Power Company Limited 7.2.1 534,500 951,731 - 797,100 689,131 21,418 8.42 0.06
Nishat Chunian Power Limited - 100,000 - - 100,000 1,030 0.40 0.03
Cement
D.G. Khan Cement Company Limited - 455,000 - 295,000 160,000 5,210 2.05 0.01
Lucky Cement Limited 269,700 390,000 - 539,700 120,000 7,949 3.13 0.04
Textile Composite
Nishat Mills Limited - 188,677 - 188,677 - - - -
Nishat Chunian Limited - 175,000 - 175,000 - - - -
Insurance
Adamjee Insurance Company Limited - 889,600 - 787,300 102,300 12,614 6.96 0.09
Pakistan Reinsurance Company Limited 55,000 - 50,000 5,000 131 0.05 0.01
Paper & Board
Packages Limited 23,200 112,900 - 111,555 24,545 3,534 1.39 0.03
Technology & Communication
Pakistan Telecommunication Company
Limited ‘A’ - 951,265 - 175000 776,265 13,701 5.39 0.01
Eye Television Network 141,000 - - 141,000 - - - -
Fertilizer
Engro 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 0.02
Fauji Fertilizer Bin Qasim Limited 637,000 567,293 - 1,204,293 - - - -
Chemicals
Colgate Palmolive (Pakistan) Limited 2,300 - - 2,300 - - - -
Descon Oxychem Limited - 100,000 - 100,000 - - - -
Synthetic & Rayon
Ibrahim Fibres Limited 351,500 736,188 - 501,845 585,843 21,454 8.43 0.19
Miscellaneous
Ecopack Limited 1,997,000 1,275,627 - 1,897,989 1,374,638 6,474 2.55 6.00
238,283
15
(UN-AUDITED)
7.2.1 Investments include quoted equity securities with market value as at December 31, 2009 aggregating
to Rs. 19.617 million which have been pledged with National Clearing Company of Pakistan Limited
for guaranteeing settlement of Fund's trades in terms of Circular No.11 dated October 23, 2007
issued by the SECP.
7.3 Debt securities - available for sale

------------- Number of certificates ------------- Carrying Outstanding
Carrying
Profit Purchases Sales value principal
As at value as a
Name of the investee company rate
July 01 during during As at as at
percentage
value as a
(%) the the December December percentage of
2009
period period 31, 2009 31, 2009 of net assets total debt issue
(Rupees in '000)
New Allied Electronics
Industries (Private) Limited - II 7.3.1 14.51 6,400 - - 6,400 - - 4.27
7.3.1 This represents sukuk certificates of New Allied Electronics Industries (Private) Limited (NAEIL).
The investment is collateralised against first pari passu charge over all present and future fixed
assets (excluding land and building) and current assets of the company, irrevocable guarantee
of A+ rated financial institution for each upcoming installment of sukuk and personal guarantees
of the sponsoring directors, as mentioned in the offering documents of the instrument.
On December 03, 2008, owing to financial difficulties, NAEIL has defaulted on payment of mark-
up amounting to Rs. 2.42 million and the Fund has made provision accordingly. The Fund has
suspended further accruals of mark-up amounting to Rs. 6.37 million till December 31, 2009.On
February 11, 2009 and March 20, 2009 the Fund received partial payments amounting to Rs.
1.166 million and Rs. 0.63 million respectively against the outstanding mark-up. MUFAP has
classified such exposure as non-performing and its credit rating has been down graded in view
of its continuous defaults. During the period an amount of Rs.16 million has been recognised as
provision in respect of non performing investment in light of Circular 1 of 2009 and provisioning
policy of the Fund duly approved by the Board of Directors of the Management Company and
related SECP circulars. Therefore, the investment has been fully provided as at December 31,
2009. Management is continuously monitoring the Fund’s exposure to this investment and is
making necessary efforts for the recovery of the amount.
The above is without prejudice to the Fund's claim against the above company for the entire
exposure and unrecognised markup and other charges etc.
7.4 Net unrealised appreciation / (diminution) in fair value of

investment classified as ‘at fair value through profit Six months ended
or loss’ - held for trading December 31
2009 2008
----(Un-audited)----
(Rupees in '000)
Fair value of investments 238,283 151,734

Less: 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)
16
(UN-AUDITED)
Six months ended

December 31
7.5 Net unrealised appreciation / (diminution) in fair value of 2009 2008
investments classified as ‘available for sale’ ----(Un-audited)----
(Rupees in '000)
Fair value of investments - 40,600

Less: Cost of investments (32,153) (58,277)
(32,153) (17,677)
Unrealised diminution / (appreciation) in fair value

of investments at the beginning of the period 16,153 -
Provision against non-performing investment 7.5.1 16,000 9,786
- (7,891)
7.5.1 This includes Rs.16 million in respect of New Allied Electronics Industries (Private) Limited
(refer note 7.3.1).
8. CONTINGENT LIABILITY
Through Finance Act, 2008 an amendment was made in section 2(f) of the Workers’ Welfare Fund
Ordinance, 1971 (the WWF Ordinance) whereby the definition of ‘Industrial Establishment’ has
been made applicable to any establishment to which West Pakistan Shops and Establishment
Ordinance, 1969 applies. Management, based on a legal advice, is of a firm view that as Collective
Investment Schemes are paper entities and are not establishments. Accordingly, the WWF Ordinance
is not applicable and therefore no provision is required in the condensed interim financial information.
However, in a remotely probable event, if the Collective Investment Schemes are considered as
industrial establishments, the impact on the NAV per unit will be Re. 0.27 as of December 31, 2009.
Mutual Funds Association of Pakistan (MUFAP), of which the Management Company is a member,
has filed a constitutional petition in the High Court of Sindh (SHC) praying it to declare that the
Collective Investment Schemes are not establishments and as a result are not liable to pay
contribution to the WWF. The legal proceedings in respect of the aforementioned petition are
currently in progress.
There were no other contingencies and commitments outstanding as at December 31, 2009 and
June 30, 2009.
9. TAXATION
The Fund's income is exempt from Income Tax as per clause (99) of part I of the Second Schedule
of the Income Tax Ordinance, 2001 subject to the condition that not less than 90% of the accounting
income for the year as reduced by capital gains whether realised or unrealised is distributed
amongst the unit holders. Furthermore, as per regulation 63 of the Non-Banking Finance Companies
and Notified Entities Regulations, 2008, the fund is required to distribute 90% of the net accounting
income other than unrealized capital gains to the unit holders. The management intends to distribute
at least 90% of the income earned by the year end by this Fund to the unit holders. Accordingly,
no provision for taxation has been made in this condensed interim financial information.
10. TRANSACTIONS WITH CONNECTED PERSONS / RELATED PARTIES

Connected persons / related parties include KASB Funds Limited (the Management Company),
KASB Bank Limited (the Holding Company of the Management Company), KASB Securities
Limited, KASB Modaraba and New Horizon Exploration and Production Limited (associated
companies of the Management Company), other Funds managed by the Management Company
17
(UN-AUDITED)
including KASB Liquid Fund, KASB Balanced Fund, KASB Islamic Income Fund, KASB Cash Fund
and KASB Capital Protected Gold Fund, Central Depository Company of Pakistan Limited (trustee
of the Fund) and directors and key management personnel of the Management Company.
Transactions with connected persons are in the normal course of business, at contracted rates
and terms determined in accordance with market rates.
Remuneration payable to the Management Company and the Trustee is determined in accordance
with the provisions of NBFC Regulations 2008 and the Trust Deed respectively.
Details of transactions with connected persons / related parties and balances with them at period
end are as follows:

10.1 Transactions 2009 2008 2009 2008
------------------(Un-audited)------------------
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 Nil 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
18
(UN-AUDITED)

2009 2008 2009 2008
------------------(Un-audited)------------------
Directors and officers of the Management Company
Investment in the Fund: 2,735 units (2008: 578

units) and 1,836 units (2008: Nil units) for the six
months and quarter respectively 110 25 72 -
Redemption from the Fund: 13,124 units (2008:
111,314 units) and 4,692 units (2008: 41,959
units) for the six months 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 and quarter respectively 6,766 4,077 416 -
Conversion out the Fund: 156,016 units (2008:
41,139 units) and 35,415 units (2008: 17,774
units) for the six months and quarter respectively 6,169 1,598 1,503 595
Switching in the Fund: 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 Fund: 154,884 units (2008:
Nil units) and 88,219 units (2008: Nil units) for
the six months and 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 months
and quarter respectively 106 - - -
Transfer out of the Fund: 3,084 units (2008: Nil
units) and Nil units (2008: Nil units) for the six
months and quarter respectively 106 - - -
19
(UN-AUDITED)
December 31 June 30
2009 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

10.3 The amount disclosed represents the amount of brokerage paid to connected person and not the
purchase or sale values of securities transacted through them. The purchase or sale values have
not been treated as transactions with connected persons as ultimate counter-parties are not
connected persons.
10.4 The rate of return on this deposit account is 12.5% per annum (June 30, 2009: 12.5% per annum).
11. DATE OF AUTHORISATION FOR ISSUE

This condensed interim financial information was authorised for issue on February 12, 2010 by
the Board of Directors of the Management Company.

20
UAN: (+92-21) 111 535 535 Toll-free: 0800 52721 URL: http://www.kasb.com

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CONTENTS

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

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

Management Company Bankers to the Fund

Company Secretary Distributors

Trustee Management Company Rating

Fund Rating - 4 star by PACRA

KASB Stock Market Fund seeks to generate long-term capital

Investing Activities and Fund’s Performance

For and on behalf of the Board

February 12, 2010 Naz Khan

Muhammad Hanif Jakhura

Karachi, February 18, 2010

Date: 12 February 2010 KPMG Taseer Hadi & Co.

As at December 31, 2009

Net assets 254,345 299,277

Unit holders’ funds 254,345 299,277

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

Net asset value per unit 39.38 32.97

For KASB Funds Limited

Six months ended Quarter ended

For KASB Funds Limited

Six months ended Quarter ended

Other comprehensive income for the period:

Net element of income and capital gains included

For KASB Funds Limited

Six months ended Quarter ended

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

Net element of income and capital gains included

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

For KASB Funds Limited

Six months ended Quarter ended

Issue of 1,650,568 units (2008: 2,722,363 units)

Redemption of 4,270,533 units (2008: 3,605,804

-amount representing accrued (income) / loss

Net income / (loss) available for distribution

Unrealised appreciation / (diminution) in fair

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

Net element of income and capital gains

Net income / (loss) (including net element of

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

For KASB Funds Limited

Six months ended Quarter ended

Decrease / (increase) in assets

Increase / (decrease) in liabilities

CASH FLOWS FROM FINANCING ACTIVITIES

1. LEGAL STATUS AND NATURE OF BUSINESS

4. ESTIMATES AND JUDGEMENTS

5. FINANCIAL RISK MANAGEMENT

6. BANK BALANCES December 31 June 30

‘Available for sale’

Shares of listed companies (Rupees in '000)

7.3 Debt securities - available for sale

7.4 Net unrealised appreciation / (diminution) in fair value of