CONTENTS
S.No
Particulars
Pg. No.
1.
Management Company & Funds Information
i
2.
Directors' Report
01
3.
Askari Income Fund
03
4.
Askari Asset Allocation Fund
17
5.
Askari Sovereign Cash Fund
29
6.
Askari Islamic Asset Allocation Fund
41
7.
Askari Islamic Income Fund
55
INFORMATION ABOUT THE MANAGEMENT
COMPANY
Registered Office
Askari Investment Management Ltd.
Room 501, Green Trust Tower, Blue Area,
Jinnah Avenue, Islamabad
Head Office
Askari Investment Management Ltd.
Mezzanine floor, Bahria Complex III
M.T.Khan Road, Karachi
UAN: 111-246-111
Email: info@askariinvestments.com
Board of Directors
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Lt. Gen. (R.) Imtiaz Hussain - Chairman
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Mr. Shahid Hafeez Azmi
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Mr. Muhammad Naseem- FCA
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Mr. Mohammad Rafiquddin Mekhari
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Maj Gen (R) Saeed Ahmed Khan
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Mr. Sufian Mazhar
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Mr. Tahir Aziz
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Mr. Saeed Aziz Khan- CEO
Executive Committee
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Mr. Shahid Hafeez Azmi
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Mr. Mohammad Rafiq Uddin Mehkari
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Mr. Tahir Aziz
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Mr. Saeed Aziz Khan- CEO
Audit Committee
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Mr. Muhammad Naseem- FCA (Chairman)
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Mr. Shahid Hafeez Azmi
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Mr. Mohammad Rafiq Uddin Mekhari
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Mr. Tahir Aziz
Chief Financial Officer: Mr. Irfan Saleem Awan
Company Secretary: Syed Shoaib Jaffery
FUNDS' INFORMATION
Registrar
Technology Trade (Pvt.) Ltd.
Dagia House: 241-C, P.E.C.H.S Block-2,
Shahrah-e-Quaideen, Karachi
(For Askari Income Fund & Askari Asset Allocation
Fund)
Bankers
Askari Income Fund:
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Askari Bank Limited
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Bank Al-Falah Limited
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Royal Bank of Scotland Limited
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Bank Al-Baraka Limited
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Arif Habib Bank Limited
Askari Asset Allocation Fund:
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Askari Bank Limited
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JS Bank Limited
Askari Sovereign Cash Fund:
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Askari Bank Limited
Askari Islamic Asset Allocation Fund:
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Askari Bank Limited
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Dubai Islamic Bank Limited
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Emirates Global Islamic Bank Limited
Askari Islamic Income Fund:
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Askari Bank Limited
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Dubai Islamic Bank Limited
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Emirates Global Islamic Bank Limited
Trustees
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CDC House, 99-B, Block B, S.M.C.H.S., Main
Shahrah-e-Faisal, Karachi
Tel: (92-021) 111-111-500
(For Askari Income Fund, Askari Asset Allocation Fund
& Askari Sovereign Cash Fund)
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MCB Financial Services Limited
Formerly Muslim Commercial Financial Services Ltd
3rd Floor Adamjee House, I.I Chundrigar Rd.,Karachi
Tel: (92-021) 3241-9770
(For Askari Islamic Asset Allocation Fund & Askari
Islamic Income Fund)
Auditors
Ernst & Young Ford Rhodes Sidat Hyder
Chartered Accountants
Progressive Plaza, Beaumont Road
P.O.Box 15541, Karachi
Tel: (92-021) 3565-0007
Legal Advisors
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Haidermota & Company
Barristers-at-Law & Corporate Counselors
D-79, Block-5, Clifton KDA Scheme no.5, Karachi
(For Askari Income Fund)
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Mohsin Tayabaly & Company
Advocates & Legal Consultants
2nd Floor, Dine Centre, PC-4, Block 9, Kehkashan,
Clifton, Karachi
(For Askari Asset Allocation Fund, Askari Islamic Asset
Allocation Fund & Askari Islamic Income Fund)
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Ajuris
Advocates & Corporate Counsel
251-B, Street No. 4, F-10/3 Islamabad
(For Askari Sovereign Cash Fund)
i
Askari Investment Management Limited
DIRECTORS' REPORT
FOR THE FUNDS UNDER MANAGEMENT OF ASKARI INVESTMENT MANAGEMENT LIMITED
The Board of Directors of Askari Investment Management Limited (AIM) is pleased to present to you the March quarter report for
the financial year 2009-2010 of the funds under management.
Economic Review
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In the foregoing quarter, improvement was witnessed in Pakistan's current account deficit. Foreign assistance was lower
than expected as release of the fifth tranche of IMF loan remained under debate.
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The International Monetary Fund expressed satisfaction over the Value Added Tax legislation, but expressed concern
over the rising budget deficit. The Executive Board will approve the fifth tranche of loan after the Board completes its
review.
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Over participation in the last three Treasury bill auction clearly shows that the money market appears to be very liquid,
with banks favoring safe investments in government securities over other forms of lending.
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SBP announced its bi-monthly Monetary Policy Statement holding the discount rate at 12.5% for Apr-May10 in line with
market expectations, acknowledging broad based improvement in macroeconomic indicators such as continued
improvement in current account, stability of PKR against USD, recovery in LSM.
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FBR collections grew by 11% YoY to PKR 905bn during 9month FY10 supported by a significant 16% YoY growth in GST
collection to PKR 371bn. The 3Q collection witnessed substantial improvement of 24% YoY to PKR 323.4bn on the back of
a low base in corresponding period of last year in line with a high interest rate environment and slow economic activity.
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Significant foreign investment inflow (US 144mn), gradually improving economic indicators and stable political situation
enabled the KSE Index to register an impressive growth of 8.43% during 1QCY10. Average volume stood at 125mn
during 1QCY10 slightly higher than the last quarter of the CY09.
FINANCIAL PERFORMANCE OF FUNDS
Askari Sovereign Cash Fund
Annualized return for ASCF for the quarter ended March 2010 was 10.86% (9 months: 10.87%) which translated to a net
income of PKR 44.369m. Remuneration of the management company amounted to PKR3.621m. Total sales amounted to PKR
1,360m, while redemptions equaled PKR 1066m.
Askari Islamic Income Fund
AIIF's annualized return for the third quarter of FY10 was 8.61% (9 month: 8.44%), which translated to a net income of PKR
5.903m over net assets of PKR 244.847mn. Total income for the March quarter amounted to PKR 7.186m while total expenses
incurred were PKR 1.283m which include Management Company's remuneration at PKR 0.861m.Total sales for the Fund in March
quarter amounted to PKR 73.387m while redemptions amounted to PKR 30.099m.
Askari Income Fund
AIF's annualized return for the quarter ended March 2010 was -2.80% (9 month: 4.38%) which translated to a net loss of
30.143m. Gross loss amounted to PKR 15.065m while remuneration of Management Company amounted to PKR 7.133m. Sales
for the third quarter of FY10 amounted to PKR 902m as compared to PKR 585m in the corresponding period last year while
redemptions decreased to PKR 1,201m as compared to PKR 1,290m. Net income for the nine months ended March 31, 2010
amounted to PKR 28.839m while Management Company remuneration amounted to PKR 31.735m.
Askari Islamic Asset Allocation Fund
Net income for AIAAF stood at PKR 1.917m for the quarter ended March 31, 2010 while total income amounted to PKR 3.542m.
Management Company's remuneration stood at PKR 0.836m. Sales amounted to PKR 0.02m; whereas there were no
redemptions during the quarter.
Askari Asset Allocation Fund
Net income for AAAF was PKR 22.051m for the March quarter as compared to PKR 57.287m over the same period last year.
Brokerage commission and Management Company remuneration amounted to Rs PKR 1.191m and PKR 1.832m, respectively.
Redemptions for the quarter amounted to PKR 20.486m. Net income for the nine months ended March 31, 2010 amounted to
PKR 109.656m while Management Company remuneration for the same period amounted to PKR 6.295m.
FUTURE OUTLOOK
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Consensus achieved by the Parliamentary Committee on Constitutional Reforms on the draft of the 18th Amendment will
bode positively for the political situation in the Country and hence KSE. In addition, gradual improvement in the law &
order situation would also augur favorably for the market.
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Any possibility of the KSE being upgraded from its present MSCI Frontier Markets Index to MSCI Emerging Markets Index
in the next MSCI revision of its Index due by May 30, 2010 may further augment foreign portfolio investment and hence
serve as a trigger for the market. On the other hand, imposition of CGT, in the absence of a leveraged product, may
negatively affect volumes and hence price discovery at the bourse especially post Federal Budget 2010-11
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Economic growth is expected to fall within the range of 2.5% - 3.5% and an upward revision of fiscal deficit target from
4.9% to 5.0-5.5% of GDP are to account for the shortfall in revenue collection.
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The finance ministry has finalized plans to issue Rs100 billion Sukuk bonds before the end of current fiscal year to retire the
circular debt that has been a major concern for the power generation companies, oil suppliers, refineries and exploration
companies.
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The State Bank of Pakistan (SBP) expects money supply to contract by 9.0 per cent during this financial year on the back of
Askari Investment Management Limited
01
tight monetary stance being pursued by it to tackle price inflation. The results of the effort have partially been
neutralized by a fresh surge in inflationary pressures due to removal of oil and power subsidies and the government's
growing needs for more borrowing from commercial banks to cover its budgetary deficit.
ACKNOWLEDGEMENT
We would like to join our colleagues on the Board, management team and employees of AIM, in thanking first and foremost the
investors of AIF, AAAF, AIIF, AIAAF and ASCF for their vote of confidence in the Fund. Additionally, we would like to thank Askari
Bank Limited, The Securities and Exchange Commission of Pakistan, The Lahore Stock Exchange (Guarantee) Limited, The
Islamabad Stock Exchange (Guarantee) Limited, The Central Depository Companies of Pakistan Limited (Trustee - AIF, AAAF &
ASCF), MCB Financial Services Limited (Trustee - AIIF & AIAAF) and Technology Trade (Pvt) Limited (Registrar - AIF & AAAF) for
their continued support and guidance.
On behalf of the Board
_________________
Saeed Aziz Khan
CEO
Dated: April 20, 2010
02
Askari Investment Management Limited
_________________
Director
Condensed Interim Financial Statements
For the Quarter Ended March 31, 2010
Chief Executive Officer
04
Askari Income Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Income Fund
05
Chief Executive Officer
06
Askari Income Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Income Fund
07
Chief Executive Officer
08
Askari Income Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Income Fund
09
10
Askari Income Fund
Askari Income Fund
11
12
Askari Income Fund
Askari Income Fund
13
14
Askari Income Fund
3,572,020
Askari Income Fund
15
Chief Executive Officer
16
Askari Income Fund
Director
Director
Condensed Interim Financial Statements
For the Quarter Ended March 31, 2010
Chief Executive Officer
18
Askari Asset Allocation Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Asset Allocation Fund
19
Chief Executive Officer
20
Askari Asset Allocation Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Asset Allocation Fund
21
Chief Executive Officer
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Askari Asset Allocation Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Asset Allocation Fund
23
24
Askari Asset Allocation Fund
Askari Asset Allocation Fund
25
26
Askari Asset Allocation Fund
Askari Asset Allocation Fund
27
6.
CONTINGENCY
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 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 financial statements. 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 Rs
0.59 as of 31 March 2010.
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.
7.
TAXATION
The Fund is exempt from taxation under clause 99 of the Part I of the 2nd Schedule of the Income Tax
Ordinance, 2001, subject to the condition that not less than 90% of its accounting income excluding realised
and unrealised capital gains for the year is distributed amongst the Fund's unit holders. The Fund intends to
avail such exemption in current and future periods. Accordingly, no provision is required for current and
deferred taxation in these condensed interim financial statements.
Chief Executive Officer
28
Askari Asset Allocation Fund
Director
Director
Condensed Interim Financial Statements
For the Quarter Ended March 31, 2010
Chief Executive Officer
30
Askari Sovereign Cash Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Sovereign Cash Fund
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Chief Executive Officer
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Askari Sovereign Cash Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Sovereign Cash Fund
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Chief Executive Officer
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Askari Sovereign Cash Fund
Director
Director
Chief Executive Officer
Director
Director
Askari Sovereign Cash Fund
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Askari Sovereign Cash Fund
Chief Executive Officer
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Askari Sovereign Cash Fund
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Askari Sovereign Cash Fund
Condensed Interim Financial Statements
For the Quarter Ended March 31, 2010
Chief Executive Officer
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Askari Islamic Asset Allocation Fund
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Askari Islamic Asset Allocation Fund
Condensed Interim Financial Statements
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Askari Islamic Income Fund
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