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SUMMARY Name ABAMCO Composite Fund Structure of Scheme Closed-end Scheme Date of Publication May 7, 2004 Investment Adviser ABAMCO Limited, licensed by the Securities and Exchange Commission

of Pakistan to undertake Investment Advisory services under the Non-Banking Finance Companies (Establishment and Regulation), Rules 2003.

Registered Address 1306-1307, Chapal Plaza, Hasrat Mohani Road, Karachi-74000 Trustee and Custodian Central Depository Company of Pakistan Limited

Stock Exchange Building, Stock Exchange Road, Karachi

Registrar Technology Trade (Pvt.) Limited 241-C, Block 2, PECHS, Karachi

Date of subscription May 14 & 15, 2004 Listed on Stock Exchanges Applied for listing on Karachi, Lahore and Islamabad Stock Exchanges

Regulatory Approvals SECP letter No NBFC-II/JD(R)/Abamco-ACF/335 dated April 16, 2004 Issue Price of Certificate Rs. 10 per Certificate (par value) Minimum application amount

Rs. 5,000/-

Capital: 1) Pre-IPO 2) Investment Adviser 3) Public Offer Total Issue Option to IFC Green Shoe option Total Capital after options are exercised

Rs. 1,590,000,000 i.e. 159,000,000 Certificates of Rs. 10/- each Rs. 410,000,000 i.e. 41,000,000 Certificates of Rs. 10/- each Rs. 1,000,000,000 i.e. 100,000,000 Certificates of Rs. 10/- each Rs. 3,000,000,000 i.e. 300,000,000 Certificates of Rs. 10/- each Rs. 400,000,000 i.e. 40,000,000 Certificates of Rs. 10/- each Rs. 750,000,000 i.e. 75,000,000 Certificates of Rs. 10/- each Rs. 4,150,000,000 i.e. 415,000,000 Certificates of Rs. 10/- each

Bankers to the issue

1. ABN AMRO Bank 2. Allied Bank of Pakistan Limited 3. Bank Al Habib Limited 4. Bank AlFalah Limited 5. Bolan Bank Limited 6. Crescent Commercial Bank Limited 7. Faysal Bank Limited 8. Habib Bank AG Zurich

9. Jahangir Siddiqui Investment Bank Limited 10. Metropolitan Bank Limited 11. Muslim Commercial Bank Limited 12. National Bank of Pakistan 13. PICIC Commercial Bank Limited 14. Soneri Bank Limited 15. The Bank of Khyber 16. The Bank of Punjab 17. United Bank Limited

Duration Perpetual Place Karachi Date of creation of scheme April 6, 2004

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OFFERING DOCUMENT

ABAMCO COMPOSITE FUND (ACoF)

(Managed by ABAMCO LIMITED, an investment adviser registered under the Non Banking Finance Companies

(Establishment and Regulation) Rules, 2003)

Established in Pakistan as a closed end trust by a Trust Deed, dated April 6, 2004 registered under the Trusts Act, 1882 (11 of 1882) between ABAMCO Limited, as the investment adviser and Central Depositary Company of Pakistan Limited, as the trustee and authorized under Rule 41 of the Non Banking Finance Companies (Establishment and Regulation) Rules, 2003) Initial Period May 14, 2004 to May 15, 2004 during banking hours

PART I – CONSTITUTION OF ABAMCO COMPOSITE FUND 1.1 Offering Document

This Offering Document sets out the arrangements covering the basic structure of the ABAMCO Composite Fund. The provisions of the Trust Deed govern this Offering Document. It sets forth information about ABAMCO Composite Fund that a prospective investor should know before investing in any certificate. Prospective investors should consult their investment adviser, stockbroker, bank manager, legal adviser or other financial adviser, if they have any doubt about the contents of this Offering Document. Investors may realize that all investments involve risk. It should be clearly understood that the portfolio of ABAMCO Composite Fund is subject to market fluctuations and risks inherent in all such investments. The value of the certificates of ABAMCO Composite Fund may appreciate as well as depreciate, as well as the level of dividend declared by ABAMCO Composite Fund may go down as well as up.

1.2 Constitution

ABAMCO Composite Fund is constituted by a Trust Deed entered into at Karachi on April 6, 2004 between:

(1) ABAMCO Limited (ABAMCO), an unlisted public company incorporated

under the Companies Ordinance 1984, with its registered office at 1306-1307, Chapal Plaza, Hasrat Mohani Road, Karachi-74000, as the establisher and the investment adviser; and

(2) CENTRAL DEPOSITORY COMPANY OF PAKISTAN LIMITED (CDC),

a public limited company incorporated in Pakistan under the Companies

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Ordinance, 1984, having its registered office at 8th Floor, Karachi Stock Exchange Building, Stock Exchange Road, Karachi as the trustee.

1.3 Definitions

Unless the context require otherwise all words, terms or expressions used in this Offering Document shall have the meaning assigned to them in Part XVII hereof.

1.4 Approval of the Securities and Exchange Commission of Pakistan

The Securities and Exchange Commission of Pakistan (SECP) has authorized the offer of certificates of ABAMCO Composite Fund under Rule 41 of the of the Non Banking Finance Companies (Establishment and Regulation) Rules, 2003 (Rules) vide letter no. No. NBFC-II/JD(R)/Abamco-ACF/335 dated April 16, 2004. The SECP has approved this Offering Document, under Rule 48 of the Rules vide letter no. NBFC-II/D(R)ABAMCO-ACF/399/04 dated April 30, 2004.

It must be distinctly understood that in giving this approval, the SECP does not take any responsibility for the financial soundness of ABAMCO Composite Fund nor for the accuracy of any statement made or any opinion expressed in this Offering Document.

1.5 Clearance of the Offering Document by the Stock Exchanges

The Offering Document has been cleared by the Karachi Stock Exchange (Guarantee) Limited (“KSE”), Lahore Stock Exchange (Guarantee) Limited (“LSE”) and Islamabad Stock Exchange (Guarantee) Limited (“ISE”) collectively referred to as the Stock Exchanges, in accordance with the requirements under the respective Listing Regulations. While clearing the Offering Document, the Stock Exchanges neither guarantee the correctness of the contents of the Offering Document nor the viability of the Scheme.

The Stock Exchanges have not evaluated the quality of the offer and their clearance of the offer should not be construed as any commitment of the same. The public/ investors should conduct their own independent investigation and analysis regarding the quality of the offer before subscribing.

1.6 Filing of the Offering Document

The Investment Adviser has filed a copy of this Offering Document signed by all the Directors along with the documents mentioned below with the Registrar of Companies CRO Karachi.

(1) Letter dated May 4, 2004 from the Auditors of ABAMCO Composite Fund, Ford

Rhodes Sidat Hyder & Co. Chartered Accountants, giving the subscription to the certificates of ABAMCO Composite Fund by the Pre-IPO investors and the investment adviser;

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(2) Consents of the Auditors, Legal Adviser, Bankers to the Issue, Trustee, Directors, Secretary and Chief Executive of the Investment Adviser to their respective appointments and having been named and described as such in the Offering Document;

(3) Letter from Ford Rhodes Sidat Hyder & Co, Chartered Accountants, Auditors of

ABAMCO Composite Fund, consenting to the issue of report appearing in Part XVI of this Offering Document;

(4) The SECP’s letter No. NBFC – 16/ IA & AMC -/02/2003, dated May 14, 2003,

licensing ABAMCO Limited to undertake investment advisory and asset management services under the Non Banking Finance Companies (Establishment and Regulation) Rules, 2003;

(5) The SECP’s letter No. NBFC-II/JD/Abamco-ACF/233, dated March 12, 2004,

approving the appointment of Central Depositary Company of Pakistan Limited as the trustee of ABAMCO Composite Fund;

(6) The SECP’s letter No. NBFC-II/JD(R)/Abamco-ACF/335 dated April 16, 2004,

authorizing a closed-end scheme named ABAMCO Composite Fund under Rule 41 of the Rules;

(7) The SECP’s letter No. NBFC-II/D(R)ABAMCO-ACF/399/04 dated April 30,

2004 approving this Offering Document; (8) Letter No. KSE/GEN-3312 dated April 22, 2004 from the Karachi Stock

Exchange (KSE), clearing this Offering Document under the listing regulations of the KSE;

(9) Letter No. LSE/(102)4563 dated April 30, 2004 from the Lahore Stock Exchange

(LSE), clearing this Offering Document under the listing regulations of the LSE;

(10) Letter No. ISE-DCA/2004/1792 dated April 28,2004 from the Islamabad Stock Exchange (ISE), clearing this Offering Document under the listing regulations of the ISE;

(11) Material contracts as given in Annexure “A”.

1.7 Listing on the Stock Exchange

Application has been made to KSE, LSE and ISE for permission to deal in and for quotation of Certificates of ABAMCO Composite Fund. In accordance with the “Regulations for Future Trading on Provisionally Listed Companies” of the KSE, LSE and ISE, the ABAMCO Composite Fund shall stand listed provisionally for trading and for the quotation of its shares on those stock exchanges from the date of publication of the Offering Document.

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If for any reason, the applications for formal listing are not accepted by the Stock Exchanges, the Offerer undertakes that a notice to that effect will be immediately published in the press, and thereafter to refund application money to the applicants in pursuance of this Offering Document, as required under the provisions of Section 72 of the Companies Ordinance, 1984.

1.8 Trust Deed

The Trust Deed is subject to and governed by the Non Banking Finance Companies (Establishment and Regulation) Rules, 2003 (Rules) and all other applicable laws and regulations. The terms and conditions in the Trust Deed and any supplemental deed shall be binding on each Certificate Holder as if he has been a party to it. The Trustee and the Investment Adviser, acting together and with the approval of the SECP, shall be entitled by supplemental deed to modify, alter or add to the provisions of the Trust Deed, in such manner and to such extent as they may consider expedient for any purpose on any of the following grounds:

1) To the extent required to ensure compliance with any applicable laws, any fiscal

or statutory requirement and regulations or any amendment of such laws and regulations;

2) To enable the provisions of the Deed to be more conveniently or economically

managed; or 3) Otherwise to the benefit of the Certificate Holders.

Provided that in case (2) and (3) above, such alteration or addition shall not prejudice the interest of the Certificate Holders; and that in any event, it shall not release the Trustee or the Investment Adviser of their responsibilities. Any amendment in the Trust Deed, which would result in change in investment objectives, shall require approval of Certificate Holders by Resolution, except for the Investment(s) mentioned in sub-para (j) for sub clause 17.4, for which Resolution will not be required.

1.9 Duration

The duration of ABAMCO Composite Fund is perpetual. However it can be wound up by the SECP or by the Investment Adviser on the occurrence of certain events as stated in Part XIV of this Offering Document under the heading “Termination of the Closed-end Scheme”.

1.10 Closed end Fund

ABAMCO Composite Fund is a closed-end fund with a capital of Rupees 3,000 Million. It is divided into 300,000,000 certificates having par value of Rupees Ten

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each. All certificates represent an undivided share in ABAMCO Composite Fund and rank pari passu as to their rights in the net assets, earning and receipt of dividend and distributions.

1.11 Initial Offer

200,000,000 certificates with a value of Rupees 2,000 million have been subscribed by Pre-IPO Investors and the Investment Adviser in the pre-IPO. Please see paragraph 5.2 for details. The Initial Public Offering (IPO) will be for 100,000,000 certificates with a value of Rupees 1,000 Million. The Initial Offering Period will be for two Business Days and starts at the start of the banking hours on May 14, 2004 and shall close at the close of the banking hours on May 15, 2004. The investment adviser has offered an option to IFC under which they can subscribe to the certificates of ABAMCO Composite Fund. Please see paragraph 5.6 for details. The investment adviser may also exercise a green shoe option in case of over subscription. Please see paragraph 5.1 for details.

PART II – OBJECTIVES AND INVESTMENT POLICY 2.1 Investment Objectives

The main objective of the ABAMCO Composite Fund is to enable the certificate holders to participate in a diversified portfolio of securities representing investments in the capital and money markets of Pakistan. The investment objective of ABAMCO Composite Fund is to, by prudent investment management, maximise the total investment return, which would consist of a combination of capital appreciation and income.

2.2 Investment Policy

ABAMCO Composite Fund will follow a “large cap” investment strategy, investing primarily in large market capitalisation companies.

Consistent with this policy, ABAMCO Composite Fund will invest primarily in equity securities and shares of large-cap companies having market capitalisation of over Rupees one billion. The Fund will also invest in debt securities up to a maximum of 20% of the net assets of the fund.

The eligible investments by ABAMCO Composite Fund means Pakistan origin investments transacted, issued, traded and listed inside or outside Pakistan and include any of the following:

(a) Investments primarily in equity securities, shares and stocks of large-cap

companies having market capitalisation of over Rupees one billion, bonds, debentures, debenture stock, warrant options, participation term certificates, modaraba certificates, musharika certificates, term finance certificates, preference shares, convertible preference shares, convertible bonds, Euro bonds, Global Deposit Receipts (GDR) and other asset backed or mortgage backed securities.

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Such investments shall include those for ready as well as those for future settlements;

(b) Treasury bills and other Government securities;

(c) Money Market instruments, Certificates of Deposit and Bankers’ Acceptances;

(d) Deposits in Commercial Banks; (e) Units in any unit trust schemes; (f) Any other equity or debt security in respect of which permission to deal on a

Stock Exchange is effective, subject to applicable Rules; (g) Investment on profit and loss basis in organizations and ventures; (h) Investment in any other equity or debt security that may or may not be listed on

the Stock Exchange; (i) Repurchase transactions (REPO’s) and reverse REPO’s including Carry Over

Transactions (COT) Purchase or sale of a security for ready settlement and reverse thereof (sale or purchase, as the case may be) for future settlement; and

(j) Any other Investment(s), which is/ are in line with the basic investment objectives

of the Fund, with the approval of SECP.

but does not include bearer security or any other security that would involve the assumption of unlimited or undeterminable liability.

Investment Criteria for selecting equity securities ABAMCO Composite Fund will only invest in shares of listed companies (or companies which are in the process of being listed), which are either:

(i) Consistently dividend paying; and/ or (ii) Have growth prospects; and/ or (iii) Are actively traded.

The investment in shares shall be subject to individual company limits and sector limits prescribed by the Rules. Investment Criteria for selecting debt securities ABAMCO Composite Fund will invest in debt securities having minimum investment grade rating. The investment in debt securities will comprise of a mix of spread transactions, Carry over Transaction (COT), purchase or sale of a security for ready settlement and reverse thereof (sale or purchase, as the case may be) for future settlement; investment grade debt securities; money market instruments and short maturity reverse repo transactions. The debt securities shall be those issued by corporate entities, federal, provincial, district governments, government agencies and municipalities.

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2.3 Investment Restrictions

(1) ABAMCO Composite Fund shall be subject to exposure limits as are provided in the Rules;

(2) ABAMCO Composite Fund shall invest not less than eighty percent of its Net

Assets in listed securities or securities in the process of being listed. (3) ABAMCO Composite Fund shall not invest in any company or security more

than ten percent (10%) of the total Net Assets of ABAMCO Composite Fund or ten percent (10%) of the issued capital of such company.

(4) ABAMCO Composite Fund shall not invest more than twenty five (25%)

percent of its Net Asset Value in securities of any one sector.

(5) ABAMCO Composite Fund will not at any time:

1. Purchase or sell:

• Bearer securities; • Securities on margins; • Securities in a forward contract; • Securities which result in assumption of unlimited or undetermined

liability (actual or contingent); • Real estate or interest in real estate save and except that the

Investment Adviser may invest in securities secured by real estate or interest therein or equity securities issued by companies that invest in real estate or interest herein;

• Commodities or commodities contracts; • Invest in anything other than Authorized Investments above;

2. Make short sales of any security or maintain a short position;

3. Pledge any of the securities held or beneficially owned by it;

4. Make a loan or advance of money to any person except in connection with

the normal business of the closed-end fund;

5. Participate in a joint account with others in any transaction;

6. Issue at any time, without prior approval of the Commission in writing, a senior security which is either stock or represents indebtness;

7. for de-listing from Stock Exchange, unless it has obtained prior approval

of SECP in writing to the close end scheme of de-listing;

8. Employ as a broker, directly or indirectly, any director, officer or employee of the Fund or its investment adviser on any Connected person or member of family of such person and enter into transaction with any connected broker, which shall equal or exceed ten percent or more of the transactions of the Fund in any one accounting year of that Fund;

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Provided that the SECP may, in each case on merits, permit the ten percent to exceed if the connected broker offers advantages to the fund not available elsewhere. Explanation: For the purpose of this clause the term “family” includes spouse, lineal ascendants and descendants and brothers and sisters;

Exception to Investment Restrictions If and so long as the value of the holding in a particular company or sector shall have reached the limit as per paragraph 2.3 (3) and (4) above, the Investment Adviser shall not purchase any further investment in such company or sector. This restriction on purchase shall not apply to any offer of right shares or any other offering, if the Investment Adviser is satisfied that accepting such offer is in the interest of the Fund. However, the Investment Adviser shall bring the investments within the prescribed limits, within six months of the receipt of such shares/ certificates

Transactions with Connected Persons

a) ABAMCO Composite Fund shall not invest in any security of a company if any director or officer of the Investment Adviser individually owns more than five per cent of the total nominal amount of the securities issued or collectively the directors and officers of the Investment Adviser in their individual capacities own more than ten per cent of those securities.

b) ABAMCO Composite Fund shall not purchase from or sell without the approval

of SECP, any security to the Investment Adviser or to the Trustee or to any director, officer or employee of the Investment Adviser or of the Trustee or to any person who beneficially owns ten percent or more of the equity of the Investment Adviser, or the Trustee save in the case such party is acting as an intermediary.

c) For the purpose of sub-paragraphs (a) and (b) above the term director, officer and

employee shall include their relatives including the spouse and dependant children.

2.4 Risk

Investors may realize that all investments in mutual funds and securities are subject to market risks. Our target return/ dividend range cannot be guaranteed. It should be clearly understood that the portfolio of ABAMCO Composite Fund is subject to market fluctuations and risk inherent in all such investments. The value of the certificates of ABAMCO Composite Fund may appreciate as well as depreciate depending on the factors and forces affecting the stock market, as well as the level of dividend declared by ABAMCO Composite Fund may go down as well as up. Past performance does not necessarily indicate future performance. All investments in mutual funds and securities are subject to market risks. Our target return/ dividend range cannot be guaranteed. ABAMCO Composite Fund’s

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certificate price is neither guaranteed nor administered/ managed. It is market determined and may be quoted below the NAV. Some of the factors which add to the risk of ABAMCO Composite Fund include but are not limited to the following factors:

a. Changes in business cycles affecting the business of the company in which the investment is made;

b. Change in the business circumstances of the company, its business sector, industry and/ or the economy in general;

c. Mismanagement of the investee company, third party liability whether through class action or otherwise or occurrence of other events such as strikes, fraud, etc. in the company in which the investment was made;

d. Senior rights of creditors over shareholders of the company in the event of winding up;

e. Volatility in shares prices resulting from their dependence on market sentiment, speculative activity, supply and demand for the shares and the liquidity in the market;

f. The possibility of defaults by participants or failure of stock exchanges, the depositaries, the settlement or the clearing system;

g. The inability of the issuer of the instrument, the relevant financial institution or the counter party in the case of reverse repurchase or other arrangements to fulfil their obligations;

h. Increase in lending rates as a result of a change in the supply and demand of liquidity in the market or on account of an increase of the underlying inflation rate;

i. Breakdown of law and order, war, natural disasters, etc. j. Any governmental actions, legislative charges or court orders restraining

payment of principal or income; k. Changes in the exchange rates.

2.5 Disclaimer

The certificates of ABAMCO Composite Fund are not bank deposits and are neither issued by, insured by, obligations of, nor otherwise supported by the SECP, the Stock Exchanges, any Government agency, the Trustee, the Investment Adviser, any of the sponsors, shareholders or employees of the Investment Adviser, any of the Pre-IPO Investors of ABAMCO Composite Fund or any other bank or financial institution.

PART III – OPERATORS AND PRINCIPALS 3.1 Investment Adviser – ABAMCO Limited

ABAMCO was incorporated on February 22, 1995 and had been licensed by the Securities and Exchange Commission of Pakistan (SECP) to act as an investment advisor under the repealed Investment Companies and Investment Advisors Rules, 1971, on February 27, 1995 and as an asset management company under the repealed Asset Management Companies Rules, 1995 on August 29, 1995. SECP has now licensed ABAMCO Limited on May 14, 2003 under Rule 5(2) of the Non-Banking

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Finance Companies (Establishment and Regulation) Rules, 2003 to undertake investment advisory and asset management services. The paid up capital of ABAMCO is Rs 212.5 million.

(a) Shareholders: ABAMCO is a subsidiary of Jahangir Siddiqui & Co. Limited.

Its other institutional shareholders include AMVESCAP Plc., International Finance Corporation, Muslim Commercial Bank Limited and Saudi Pak Commercial Bank Limited.

1) Jahangir Siddiqui & Co. Limited (“JSCL”) is a full service financial

services firm listed on the Karachi Stock Exchange (Guarantee) Limited. JSCL is engaged in the securities industry of Pakistan and has four major business segments including: (i) equities, (ii) money and bond markets, (iii) corporate finance, (iv) research. The firm also engaged in investment banking (via Jahangir Siddiqui Investment Bank Limited) and mutual fund management (via ABAMCO Limited). The Pakistan Credit Rating Agency (Pvt) Limited (PACRA) has assigned the long term and short term ratings of the Company at AA+ (Double A plus) and A1+ (A one plus) respectively. As on December 31, 2003, JSCL had shareholders equity of Rs. 2,301 million making it the largest publicly listed securities firm in Pakistan. For the six months period ended December 31, 2003, JSCL had a consolidated profit after tax (excluding minority interest) of PKR 346 million (USD 6.03 million). Consolidated shareholders’ equity as at December 31, 2003 was PKR 2,620 million (USD 45.70 million).

2) AMVESCAP Plc. is one of the world's largest asset managers, with

approximately $370 billion in assets under management and with a worldwide network, which was formed through the merger of AIM Management Company Group Inc. with and into a subsidiary of INVESCO Plc. Through its subsidiary companies AMVESCAP Plc. conducts operations in North and South America, Europe, Asia and Australia, with major offices in Atlanta, New York, Houston, Toronto, London, Dublin, Paris, Frankfurt, Brussels, Milan, Tokyo, Hong Kong, Melbourne and Buenos Aires. AMVESCAP Plc. and its subsidiaries provide investment management and related services to a wide range of institutional and retail clients, including regulated investment companies and other pooled investment schemes. These investment products are sold under the "AIM" and "INVESCO" brand names. AMVESCAP Plc. is listed on the London Stock Exchange.

3) International Finance Corporation (IFC) is a member of the World Bank

Group, which is a multilateral development organization, and is headquartered in Washington, DC. The IFC was established in 1956 and promotes sustainable private sector investment in developing countries as a way to bring economic development and to improve the quality of the lives of people in its developing member countries. IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. Its equity capital is provided by its member countries,

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both developed and developing, which collectively determine its policies and activities.

IFC promotes sustainable private sector development primarily by:

• Financing private sector projects located in the developing world.

• Helping private companies in the developing world mobilize financing in international financial markets.

• Providing advice and technical assistance to businesses and governments.

4) Muslim Commercial Bank Limited (MCB), a true success story of the Privatization process of Pakistan, is a major player in banking sector of the country having deposits of over Rs. 200 billion and millions of account holders. It has a network of over 1,000 branches all over the country with business establishments in Sri Lanka and Bahrain. MCB has the largest ATM and On-line branches network in Pakistan with 190 ATMs and 265 On-line branches all over the country. Additionally, MCB MNET has provided an accessibility platform to its ATM network to several member banks. MCB focuses on creating and managing value by providing new products, which will result in a continuous leadership in the banking sector. Euromoney, Europe's leading Banking, Financial and Corporate magazine granted MCB the "Best Bank in Pakistan" in 2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards for its continuous and innovative services to its customers. MCB has emerged as one of the foremost privatized financial institutions in Pakistan endeavoring to gear up operations to meet the demands of the future.

5) Saudi Pak Commercial Bank Limited is a subsidiary of Saudi Pak

Industrial and Agricultural Investment Company (Private) Limited (Saudi Pak), which was established in 1981 by the Governments of the Kingdom of Saudi Arabia and the Islamic Republic of Pakistan, primarily to promote industrial development in Pakistan. Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Limited acquired controlling interest in Prudential Commercial Bank Limited now Saudi Pak Commercial Bank Limited in September 2001. The Bank has a paid up capital of Rs.1,500 million and is listed on the Stock Exchange. The Bank has variety of products to mobilize deposits from general public and corporate entities, and provides full range of funded and non-funded financing facilities to its customers.

(b) The Board of Directors of the Investment Adviser:

Name, Occupation and Address Other Directorship Chairman 1) Mr. Munawar Alam Siddiqui

Director BSJS Balanced Fund Limited

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Business Executive C-103, PAF Base Faisal, Shahrah-e-Faisal, Karachi

Chief Executive 2) Mr. Muhammad Najam Ali

Business Executive

96/I, 25th Street, Off Khayaban-e-Muhafiz, Phase VI, DHA, Karachi

Jahangir Siddiqui Investment Bank Limited Al Abbas Sugar Mills Limited Chief Executive BSJS Balanced Fund Limited Director Dadex Eternit Limited

Directors 3) Mr. Mazharul Haq Siddiqui

Educationalist & Civil Servant Vice Chancellor’s House University of Sindh, Jamshoroo

Chairman Jahangir Siddiqui Investment Bank Limited Jahangir Siddiqui & Co. Limited

4) Mr. Munaf Ibrahim Business Executive B-55, Block B, Street 6, S.M.C.H.S., Karachi-74400

Chief Executive Jahangir Siddiqui & Co. Limited DirectorAl Abbas Sugar Mills Limited Siddiqui Foundation

4) Mr. Abid Hussain Zuberi Banker

B-19, Overseas Bungalows Sector 16-A, Gulistan-e-Johar, Karachi

Chairman Ryan Agencies (Pvt.) Limited BSJS Balanced Fund Limited

6) Shaikh Mukhtar Ahmed Business Executive 3, Race Course Road, Faisalabad

Director BSJS Balanced Fund Limited First Women Bank Limited (MCB Nominee) Ibrahim Agencies (Pvt.) Limited Ibrahim Fibres Limited Muslim Commercial Bank Limited Commercial Union Life Assurance Co.(Pak) Limited

7) Mr. William H. Kleh Business Executive 66, Chelsea Park Gardens London SW3-6AE United Kingdom

Director AIM Capital Funds PLC AIM Capital Management Limited

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Company Secretary

Syed Owais Wasti R 128 Block 6, Gulshan Iqbal, Karachi-75350

Director Confidence Financial Services Limited

(c) Particulars of the Directors:

Chairman:

Mr. Munawar Alam Siddiqui Mr. Munawar Alam Siddiqui is a pilot, recently retired from the Pakistan Air Force. He was commissioned in the GD(P) Branch of the Pakistan Air Force in October 1974. He has served as a VVIP and Presidential pilot during his tenure of service and has held various key Command and Staff appointments in the PAF. He served as Director of Air Transport at Air Headquarters from 1996 to August 1998 and commanded an Operational PAF Base from December 2000 to December 2002. He retired as an Air Commodore from the Pakistan Air Force in October 2003, having served last as the Assistant Chief of Air Staff (Administration) at the Pakistan Air Force Headquarters. For his meritorious services to the PAF, he was awarded Tamgha-e-Imtiaz (Military) and Sitara-e-Imtiaz (Military). An alumna of National Defence College, he holds two Graduate and two Post-Graduate Degrees in Science from various universities in Pakistan. Currently, he is serving as Director, Principal Investments at the Jahangir Siddiqui Group, in addition to being a Director at the Jahangir Siddiqui Investment Bank Limited, BSJS Balanced Fund Limited & Al Abbas Sugar Mills Limited.

Chief Executive: Mr. Mohammad Najam Ali Mr. Najam Ali is a graduate in Economics from the University of Michigan, Ann Arbor, USA. He is also a qualified Chartered Accountant and holds memberships of the Institute of Chartered Accountants in England & Wales and the Institute of Chartered Accountants of Ontario, Canada. Mr. Najam Ali joined ABAMCO as Chief Executive Officer in January 2004. Prior to his appointment, he was the Executive Director of the Non-Banking Finance Companies Department at the Securities and Exchange Commission of Pakistan (SECP), where he was involved in regulation, monitoring and enforcement for mutual funds, modarabas, leasing, housing finance, investment banking, venture capital & discount houses.

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Prior to his appointment in the SECP, he served as CEO of the Central Depository Company for 6 ½ years and led the development of the National Clearing & Settlement System and launched the Investor Account and Trustee Services at the CDC. He has also served as a director to the National Clearing Company of Pakistan Limited and the Karachi Stock Exchange (Guarantee) Limited. His other assignments included his engagement as the Group Financial Controller and Head of Operations in addition to the Head of Money & Capital Market at the Fidelity Investment Bank. He has also worked with the Robson Rhodes, Chartered Accountants, a member firm of the RSM Group in the UK, as a chartered accountant.

Directors:

Mr. Mazhar ul Haq Siddiqui

Mr. Mazhar ul Haq Siddiqui is an eminent civil servant and educationist. He has held many senior positions in the Government of Pakistan. He joined Income Tax Department in 1957 and served in various capacities including the Commissioner of Income Tax. He served the Provincial Governments as Secretary Education, Finance and Service and General Administration. He has served the Federal Government as Secretary in Establishment, Economic affairs, Education, Management Services, Economic Affairs Statistics and Youth Affairs Divisions. He was Vice Chancellor, Sindh University for a period of four years (1984-88) and at present on rejoining Sindh University in July 2001, he continues to be its Vice Chancellor till date. He has also held the position of Chairman, National Insurance Corporation and Member, Federal Public Services Commission.

Mr. Munaf Ibrahim

Mr. Munaf Ibrahim, the Chief Executive of Jahangir Siddiqui & Company Limited (JSCL) is a Fellow member of the Institute of Chartered Accountants of Pakistan and the Institute of Cost & Management Accountants of Pakistan. He has been associated with the company for more than a decade. In 1995 he was elected on the Board of Directors of JSCL and held that position till September 1999 when he was appointed as Chief Executive. He has been a member of various committees of the Karachi Stock Exchange (G) Limited. These committees are in place so as to improve the overall performance of the Stock Exchange as a trading body. Mr. Ibrahim holds directorships in Jahangir Siddiqui & Company Limited, ABAMCO Limited, Siddiqui Foundation and Al-Abbas Sugar Mills Limited. He has also previously held the directorship of Jahangir Siddiqui Investment Bank Limited, Confidence Financial Services Limited, Security Fund Management Limited EFU Life Assurance Limited, Confidence Mutual Fund Limited and Security Stock Fund Limited.

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Mr. Abid Hussain Zuberi Mr. Abid Hussain Zuberi is a graduate from Aligarh Muslim University. He is a career banker. He joined Habib Bank Limited in October 1947 and moved to Muslim Commercial Bank Limited (MCB) in 1951. He served the bank in the capacity of Circle executive, Provincial Chief and finally promoted to Senior Executive Vice President from where he retired in 1987. In 1982 he was sent to the Allied Bank of Pakistan Limited as Director of the bank and Member Executive Board. He was elected Fellow of the Institute of Bankers in Pakistan in 1982.

Shaikh Mukhtar Ahmed

Shaikh Mukhtar Ahmed, who is representing Muslim Commercial Bank Ltd on the Board, is a leading businessman of the country. He is the Chairman of Ibrahim Group of companies having about 48 years of experience in the business and industry. He has established Ibrahim Textile Mills Limited, A.A. Textiles Ltd, Zainab Textile Mills Ltd, Ibrahim Energy Ltd and Ibrahim Fibres Limited The Textile Spinning units and Power project have now been merged into Ibrahim Fibres Limited. Shaikh Mukhtar Ahmed entered in the financial sector field in 1993 and established First Ibrahim Mudarabah and Ibrahim Leasing Limited In 2001, First Ibrahim Mudarabah was merged with Ibrahim Leasing Limited

Mr. William H. Kleh

Mr. William H. Kleh is a citizen of the United States residing in London, where he currently engages in various private investment-related activities. Mr. Kleh was qualified in several U.S. jurisdictions as an attorney and, prior to his retirement in April 1999, served as General Counsel and Senior Compliance Office of AMVESCAP, PLC, the U.K. holding company formed by the merger in February 1997 of AIM Management Group Inc. and INVESCO PLC. Prior to the merger Mr. Kleh served as Managing Director of AIM Global Advisors Limited, AIM’s U.K. subsidiary company and IMRO-regulated investment adviser to a number of investment companies sponsored by AIM and sold to investors outside the United States. Mr. Kleh is presently a director of the Dublin-based AIM Capital Funds and of AIM Capital Management Company Limited, the manager of those funds. Prior to 1994 Mr. Kleh served as general counsel of AIM Management Group Inc. He is also serving on the board of various charitable organizations in England and in the United States.

Company Secretary

Syed Owais Wasti Syed Owais Wasti is an Associate Member of the Institute of Cost & Management Accountants of Pakistan. He has been with ABAMCO since October 1997 and is presently acting as its Chief Financial Officer and the Company Secretary. He is Director on the Board of Confidence Financial

Services Limited. He has previously worked with Jahangir Siddiqui & Co. Limited

(d) Funds under management of the Investment Adviser:

ABAMCO is presently managing three open ended mutual funds, namely Unit Trust of Pakistan, UTP-Income Fund, UTP-Islamic Fund and four closed end mutual funds, namely BSJS Balanced Fund, ABAMCO Stock Market Fund (former 21st, 23rd & 25th ICP Mutual Funds), ABAMCO Capital Fund (former 1st, 3rd, 8th, 11th, 12th, 15th, 19th & 20th ICP Mutual Funds) and 4th ICP Mutual Fund. The total net assets of the funds under the management of ABAMCO are over Rs. 10.8 billion as of March 31, 2004.

UNIT TRUST OF PAKISTAN Fact Sheet

First open ended mutual fund in the private sector in Pakistan Objectives: Capital Preservation, Diversification, Liquidity, Growth and

Consistent Returns

Funds under Management of ABAMCO as on March 31, 2004(Rs in Millions)

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

Fund Size 3,115 1,291 663 1,565 1,186 2,388 595

UTP UTP-IF UTP-ISF BBF ASMF ACF 4th ICP

• Public offering: October 27, 1997 • Track record: Over 6 years • Seed capital: Rs. 325 million • Net assets: Over Rs. 3.11 billion* • Par Value: Rs. 5,000 • Rating: AA(f) by PACRA • Strategy: Balanced • Listing: Lahore Stock Exchange • Structure: open-end • Average annualized return: 26.87%*

17

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• Lowest ever dividend: 12.00% • Highest ever dividend: 25.00%

*As of March 31, 2004

UTP’s past performance since the date of commencement is as given in the following chart: Period Ended Dividend (%) Total Compound Return (%) June 30, 1998 11.00 16.50 June 30, 1999 13.75 15.23 June 30, 2000 22.50 29.80 June 30, 2001 12.00 17.14 June 30,2002 15.00 17.52 June 30, 2003 25.00 25.00

UTP- INCOME FUND Fact Sheet

Second open ended mutual fund by ABAMCO Objectives: Capital Preservation, Diversification, Liquidity, Safety of

Capital and Consistent Returns

• Public offering: August 26, 2002 • Track Record over 1 year • Seed capital: Rs. 50 million • Net assets: Over Rs.1.29 billion* • Par Value: Rs. 500 • Strategy: Fixed Income only • Listing: Lahore Stock Exchange • Structure: open-end

• Average Annualized return 9.83%* • Dividend 9.50%**

*As of March 31, 2004 ** ten months dividend annualized 11.25%

UTP – ISLAMIC FUND

First Shariah complaint open ended mutual fund in Pakistan Objectives: Capital Preservation, Diversification, Liquidity, Growth and

Consistent Returns Fact Sheet

• Public offering: December 27, 2002 • Seed capital: Rs. 60 million • Track record: Over 1 year • Net assets: Over Rs. 662 million* • Par Value: Rs. 500 • Strategy: Islamic modes of Investment

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• Listing: Lahore Stock Exchange • Structure: open-end

• Average Annualized return 37.45%* • Dividend 8.00%**

*As of March 31, 2004 ** six months dividend annualized 16%

BSJS BALANCED FUND

First mutual fund by ABAMCO Objectives: Capital Preservation, Diversification, Liquidity, Growth and

Consistent Returns Fact Sheet

• Public offering: January 14, 1996 • Track record: Over 7 years • Initial Paid up Capital: Rs. 150 million • Current Paid up capital: Rs. 1,054 million • Net assets: Over Rs. 1.56 billion* • Par Value: Rs. 10 • Rating: AA(f) by PACRA • Strategy: Balanced • Listing: Karachi Stock Exchange • Structure: closed-end • Lowest ever dividend : 8.00% • Highest ever dividend: 31.00%

*As of March 31, 2004

Initial paid up capital of BSJS Balanced Fund (BBF) was Rs. 150 million. Confidence Mutual Fund Limited, whose management was acquired by ABAMCO on September 04, 2000, was merged with BBF w.e.f. July 1, 2000 and paid up capital of BBF was increased to Rs. 250 million. Security Stock Fund Limited (SSF), with a paid up capital of Rs. 100 million was another mutual fund whose management was acquired by ABAMCO on October 18, 2001, was merged with BBF w.e.f. July 1, 2001 and the paid up capital of BBF was increased to Rs. 340 million. BBF announced 10% bonus issue and 2:1 rights at par on June 30, 2003. The paid up capital of BBF has now increased to Rs. 1,054 million after rights and bonus issue.

ICP MUTUAL FUNDS LOT “A” Consequent upon the privatization of the ICP Mutual Funds, Lot “A” of ICP Mutual Funds containing 1st ICP, 3rd ICP, 4th ICP, 8th ICP, 11th ICP, 12th

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ICP, 15th ICP, 19th ICP, 20th ICP, 21st ICP, 23rd ICP and 25th ICP, came under the management of ABAMCO on October 11, 2002. The aggregate net assets of the funds were Rs. 1.53 billion on September 30, 2002. Under ABAMCO’s management this figure rose to Rs 4.17 billion by March 31, 2004. This is an overall appreciation of 172.55% in over a year. The ICP Mutual Funds are now being reorganized as closed end schemes under the NBFC Rules into three funds, ABAMCO Stock Market Fund, ABAMCO Capital Fund and 4th ICP Mutual Fund.

21st, 23rd & 25th ICP Mutual Fund have been merged into ABAMCO Stock Market Fund after approval from the SECP & certificate holders of 21st, 23rd and 25th ICP Mutual Fund at the Extra-Ordinary General Meeting which held on November 1, 2003. 1st, 3rd, 8th, 11th, 12th, 15th, 19th & 20th ICP Mutual Fund have been merged into ABAMCO Capital Fund after approval from the SECP & Share holders at the Extra-Ordinary General Meeting which held on December 20, 2003. 4th ICP Mutual Fund: On the event of Extra-ordinary General Meeting the Share holders of 4th ICP Mutual fund did not agree on being amalgamated into ABAMCO Capital Fund. Therefore ABAMCO Limited has decided that 4th ICP Mutual Fund will be reorganized as a separate closed end trust.

(e) Powers of the Directors of the Investment Adviser:

The business of the Fund shall be managed by the Directors of the Investment Adviser who may exercise all such powers of the Fund as are prescribed by the Rules or any statutory modification thereof for the time being in force or by the Articles of ABAMCO Limited or by a special resolution, required to be exercised by the company in its General Meeting, subject nevertheless to any regulation of its Articles, to the provisions of the Companies Ordinance, and to such regulations being not inconsistent with the aforesaid regulations or provisions, as may be prescribed by the company in its General Meeting; but no regulation made by the company in its General Meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made.

(f) Remuneration of the Directors of the Investment Adviser

The remuneration of a Director for attending meetings of the Board or any Committee of the Board shall from time to time be determined by the Directors provided that neither the Chief Executive nor any Director in whole time remunerated service with the company shall be entitled to any payment for attending meetings of the Board. A Director may also be paid all travelling, hotel and other expenses properly incurred by him in attending and returning from meetings of the Directors or any committee of Directors or general meeting of the company or in connection with the business of the company.

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(g) Interest of the Directors of the Investment Adviser in the promotion of the

ABAMCO Composite Fund: The interest of the Directors of the Investment Adviser in the promotion of the ABAMCO Composite Fund shall be to the extent of the management fee earned by the Investment Adviser.

(h) Interest of the Directors of the Investment Adviser in property acquired for

the Fund:

No property has been acquired for the Fund. (i) Election/ Appointment of the Directors of the Investment Adviser

The Directors shall, unless the number of persons who offer themselves for election is not more than the number of directors fixed under Article 59, be elected by the Members of the Investment Adviser in General Meeting in the following manner, namely: (a) Every member present in person or proxy shall have such number of votes

as is equal to the product of the number of voting shares or securities held by him and the number of directors to be elected;

(b) The number of votes calculated in accordance with the preceding clause (a)

may be given to a single candidate or may be divided between any two or more candidates in such manner as the person voting may choose; and

(c) The candidate who gets the highest number of votes shall be declared as

Director and then the candidate who gets the next highest number of votes shall be so declared and so on until the total number of directors to be elected has been so elected.

Notwithstanding that the number of persons offering themselves for election as directors fixed under the Article 59, the number of votes cast in favour of each candidate and the name of the member casting such vote shall be recorded in the minutes of the meeting.

(j) Benefit to the promoters & Officers of the Fund during the last two years:

None as it is a new Fund.

(k) Borrowing Powers of the Investment Adviser: (a) The Directors may exercise all the powers of the company to raise money

and to mortgage or charge its undertaking or property or any part thereof and to issue debentures or redeemable capital and other securities whether outright or as security for any obligation or liability or debt of the company or any third party; provided that the amount for the time being

22

remaining undischarged in respect of any money so raised or security provided by the Directors as aforesaid shall not at any time, without the previous sanction of the company in General Meeting exceed the paid up share capital for the time being of the company, but nevertheless, no person providing financing to or otherwise dealing with the company shall be concerned to see or inquire whether the limit is observed.

(b) In exercising the powers of the company aforesaid that Directors may,

from time to time and on such terms and conditions as they think fit, raise money from banks and financial institutions and from other persons under any permitted system of financing, whether providing for payment of mark-up or some other form of return, and in particular the Directors may raise money on the basis of mark-up price, musharika, modaraba, sale and lease back or any permitted mode of financing, and without prejudice to the generality of the foregoing the Directors may exercise all or any of the powers of the company arising from section 196 of the Companies Ordinance.

(c) Subject to the provisions of Articles in regard to the issue of securities,

the Directors may exercise all or any of the powers of the company arising under section 87, 120 and 196 of the Companies Ordinance and in particular the Directors may issue any security as defined in section 2(1) (34) of the Companies Ordinance or may issue any instrument or certificate representing redeemable capital as defined in Section 2(1) (30A) of the Companies Ordinance or participatory redeemable capital as defined in Section 2(1) (25) of the Companies Ordinance.

(l) For the above mentioned sub clauses 3.1 (e), (f), (i) and (k), the word

“company” shall refer to ABAMCO Limited.

(m) Break-up value per share of the Investment Adviser:

Rs. 21.62 as on December 31, 2003

(n) Over due Loans of the Investment Adviser:

None

(o) Legal Proceedings against the Investment Adviser:

None (p) Professional and Independent Management

The Investment Adviser manages the funds under its management on a strictly professional basis. An Investment Committee, comprising of experienced professionals, make the investment decisions. The Investment Committee have the support of in-house research department, which carries out continuous fundamental analysis. The Investment Adviser has hired professional and

23

qualified individuals to manage the Funds who have a high standing in the market.

(q) Duties and Responsibilities of the Investment Adviser:

(i) The responsibilities of the Investment Adviser is to invest and manage the

assets of ABAMCO Composite Fund according to the provisions of the Trust Deed, in good faith, to the best of its ability and without gaining any undue advantage for itself or any Connected Persons.

(ii) The Investment Adviser shall maintain proper accounts and records of

ABAMCO Composite Fund to enable a complete view of assets and liabilities, income and expenditure and amounts received in respect of subscription of Certificates and paid out on purchase of securities for investment purposes and by way of distribution.

(iii) The Investment Adviser shall prepare and transmit to Certificate Holders

and SECP the annual report together with balance sheet and income and expenditure account and auditors report within four months of the close of the financial year. The Investment Adviser shall also prepare and transmit to Certificate Holders and SECP the balance sheet and income and expenditure account in respect of first and third quarter and first half of the year, within the time frame prescribed by the SECP from time to time.

(iv) The Investment Adviser shall make available to the Trustee all

information relating to the Fund. The Investment Adviser shall account to Trustee for any loss in value of the assets of ABAMCO Composite Fund caused by its negligence, reckless or wilful act or omission.

(v) The Investment Adviser shall be responsible for all acts and omissions of

all persons or agents to whom it may delegate the performance of its duties, as if these were its own acts and omissions.

(vi) The Investment Adviser shall instruct the Trustee for any purchase and

sale of investments, including placement of cash with various banks. (vii) The Investment Adviser shall if it considers necessary request the Trustee

in writing, for the protection of Deposited Property or safeguarding the interest of the Certificate Holders, to institute or defend any suit, proceeding, arbitration or inquiry or any corporate or shareholders’ action in respect of the Deposited Property or any part thereof.

(viii) The Investment Adviser shall not be under any liability except such

liability as may be expressly assumed under the Rules and the Trust Deed nor shall the Investment Adviser (save as otherwise provided) be liable for any act or omission of the Trustee nor for anything except its own negligence or wilful breach of duty.

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3.2 Trustee – The Central Depository Company of Pakistan Limited

Central Depository Company of Pakistan Limited (CDC) was incorporated in 1993. It was formed inter alia, for facilitating efficient, risk free and cost effective settlement of securities transactions in accordance with the International standards to cope up with the ever-rising volume of trading in securities at the Stock Exchanges in Pakistan. Given CDC’s significance, the legislature enacted to special law, known as Central Depositories Act, 1997 and the Government has also approved the rules and regulations relating to the operational aspects of the Central Depository System. The Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 allow a Central Depository Company to act as the Trustee of closed-end schemes set up under the Rules. (a) Shareholders: The sponsors and the shareholders of CDC include the Karachi

Stock Exchange, the Lahore Stock Exchange, the Islamabad Stock Exchange, International Finance Corporation (IFC) Citibank Overseas Investment Corporation, National Investment Trust Limited (NIT), Investment Corporation of Pakistan (ICP), Pakistan Industrial Credit and Investment Corporation Limited (PICIC), Muslim Commercial Bank Limited and Habib Bank Limited.

(b) Management: CDC is run purely on professional management basis and most

of the Directors on the Board of CDC represent their respective investor institutions, without any personal stake in the company. The chief executive is a highly qualified professional without any affiliation in any investor institution.

(c) Trustee Division: CDC has set up a separate trustee division with a dedicated

team of professionals responsible for its day to day functions. The Trustee Division has the benefit of CDC’s existing structure, as well as that for handling the National Clearing and Settlements System.

(d) CDC’s Mission and Vision: The mission of CDC is to offer a wide range of

services that will support the capital markets so as to contribute to the country’s ability to support and develop the Pakistani Capital Market as the hub of financial activities in the region. CDC’s goals are to eliminate paper based settlement, to diversify its services, and to become a leading institution of the region.

(e) Duties and Responsibilities of the Trustee

i) The Trustee will take into custody and under its control all the property of

ABAMCO Composite Fund and hold it in trust for the Certificate Holders and the cash and registerable assets shall be registered in the name of, or to the order of the Trustee.

ii) The Trustee will carry out the instructions of the Investment Adviser in all

matters including investment and disposal of the Deposited Property, unless

25

they are in conflict with the Trust Deed, the Offering Document and the Rules.

iii) The Trustee shall exercise all due diligence and vigilance in carrying out its

duties and in protecting the interests of the certificate holders.

iv) The Trustee shall issue a report to the Certificate Holders to be included in the annual report, whether in its opinion, the Investment Adviser has in all material respect managed the Deposited Property in accordance with the provisions of the Rules and the Trust Deed and if the Investment Adviser has not done so, the respect in which it has not done so and the steps the Trustee has taken in respect thereof.

v) The Trustee shall institute or defend any suit proceedings, arbitration or

inquiry or any corporate or shareholders action in respect of the Deposited Property or any part thereof if so requested by the Investment Adviser in writing.

vi) The Trustee shall be responsible for all acts and omissions of all persons or

agents to whom it may delegate the performance of its duties, as if these were its own acts and omissions.

vii) The Trustee shall account for any loss in value of the Deposited Property

where such loss has been caused by negligence or any reckless or willful act and/ or omission of the Trustee or any of its director, officers, nominees or agents.

viii) The Trustee shall not be under any liability on account of anything done or

suffered by ABAMCO Composite Fund in good faith in accordance with or in pursuance of any request of the Investment Adviser provided they are not in conflict with the provision of the Deed or the Rules.

ix) The Trustee shall ensure that the investment limits set out in the Rules and

Trust Deed and the constitution under which the ABAMCO Composite Fund is authorized are complied with.

x) The Trustee shall be required to adhere to performance standards, as

mutually agreed upon between the Investment Adviser and the Trustee, from time to time.

3.3 Foreign Investors of ABAMCO Composite Fund

International Finance Corporation 3.4 The Auditors

Ford Rhodes Sidat Hyder & Co. 6th Floor, Progressive Plaza, Beaumont Road, Karachi

3.5 The Registrar Technology Trade (Pvt.) Limited 241-C, Block 2, PECHS, Karachi

3.6 The Legal Advisers

Bawaney & Partners 404, 4th Floor, Beaumont Plaza, 6-cl-10, Beaumont Road, Civil Lines, Karachi

PART IV– CHARACTERISTICS OF THE CERTIFICATES 4.1 Minimum amount of application

Application for subscription in the ABAMCO Composite Fund must be made for 500 certificates or multiples thereof. Application for Certificates below the value of Rs.5,000/- shall not be entertained. Certificates will be issued in lots of 500 certificates of the face value of Rs. 10/- each.

4.2 Fictitious and more than one applications are prohibited and such applicants

money shall be liable to confiscation under section 18-A of the Securities and Exchange Ordinance, 1969.

PART V– TYPES OF THE CERTIFICATES 5.1 Issue of Certificates

ABAMCO Composite Fund has a capital of Rupees 3,000 Million which is divided into 300,000,000 certificates having par value of Rupees Ten each, the break up of which is as given below:

Number of Certificates of Rs.10 each

Total Value (Rupees)

Fully paid up in cash by the ABAMCO Limited 41,000,000 410,000,000

Fully paid in cash by pre-IPO investors 159,000,000 1,590,000,000

Initial Public Offering 100,000,000 1,000,000,000

Total Issue 300,000,000 3,000,000,000

Option to IFC 40,000,000 400,000,000

Green shoe option 75,000,000 750,000,000 Total Issue after exercising IFC and Green Shoe Option 415,000,000 4,150,000,000

26

27

Option to IFC: ABAMCO Limited has offered an option to International Finance Corporation (IFC) under which they would subscribe to the certificates of ABAMCO Composite Fund up to an amount of Rupees 400 million. The details of the option to IFC as required under clause 8 of Part I of the Second Schedule of the Companies Ordinance are given in clause 5.6 below.

Green Shoe Option: In case of over subscription, ABAMCO Limited may exercise a green shoe option, in part or in whole, and offer up to an additional 75,000,000 certificates of an amount of Rs. 750 million. If the IFC and green shoe option is exercised, then the paid up capital of the ABAMCO Composite Fund would be Rupees 4,150 million. ABAMCO Composite Fund shall dispatch physical Certificates to successful applicants or credit in the respective CDS account within thirty days of the date of subscription, in compliance with the requirement of the Stock Exchanges.

5.2 Pre-IPO Investors

The pre-IPO Investors of ABAMCO Composite Fund are the following, who have subscribed the amount as stated against their names in the Pre-IPO.

Pre-IPO Investors No. of Certificates Rupees

ABAMCO Limited 41,000,000 410,000,000 The Bank of Punjab 20,000,000 200,000,000 Bolan Bank Limited 10,000,000 100,000,000 Motiwala Securities (Pvt.) Limited 10,000,000 100,000,000 Saudi Pak Industrial and Agricultural Co. (Pvt.) Limited 10,000,000 100,000,000

Askari Commercial Bank Limited 5,000,000 50,000,000 Askari Leasing Limited 5,000,000 50,000,000 East West Insurance Co., Limited 5,000,000 50,000,000 Metropolitan Bank Limited 5,000,000 50,000,000 Pakistan Industrial Credit and Investment Corporation Limited 5,000,000 50,000,000

PICIC Commercial Bank Limited 5,000,000 50,000,000 Muslim Commercial Bank Limited 3,250,000 32,500,000 Noman Abid & Company Limited 3,000,000 30,000,000 The Bank of Khyber 3,000,000 30,000,000 Jahangir Siddiqui Investment Bank Limited 2,800,000 28,000,000 A. R. Securities (Pvt.) Limited 2,500,000 25,000,000 Aqeel Karim Dhedi Securities (Pvt.) Limited 2,500,000 25,000,000 Atlas Investment Bank Limited 2,500,000 25,000,000 Bank Al Falah Limited 2,500,000 25,000,000 Escorts Investment Bank Limited 2,500,000 25,000,000 Habib Bank A G Zurich 2,500,000 25,000,000 Javed Omer Vohra & Company Limited 2,500,000 25,000,000 National Bank of Pakistan 2,500,000 25,000,000

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Pak Oman Investment Co (Pvt.) Limited 2,500,000 25,000,000 Prime Commercial Bank Limited 2,500,000 25,000,000 Saudi Pak Commercial Bank Limited 2,500,000 25,000,000 Security Leasing Corporation Limited 2,500,000 25,000,000 Soneri Bank Limited 2,500,000 25,000,000 Union Bank Limited 2,500,000 25,000,000 Ibrahim Agencies (Pvt.) Limited 2,000,000 20,000,000 NBP Capital Limited 2,000,000 20,000,000 First Punjab Modaraba 1,500,000 15,000,000 Mr. Kausar Abbas Bhayani (Member Karachi Stock Exchange) 1,500,000 15,000,000

Trust Investment Bank Limited 1,500,000 15,000,000 Al-Zamin Leasing Modaraba 1,000,000 10,000,000 Bank Al Habib Limited 1,000,000 10,000,000 EFU General Insurance Limited 1,000,000 10,000,000 EFU Life Assurance Limited 1,000,000 10,000,000 First International Investment Bank Limited 1,000,000 10,000,000 National Refinery Limited - Managerial & Supervisory Staff Pension Fund Trust 1,000,000 10,000,000

New Jubilee Insurance Company Limited 1,000,000 10,000,000 New Jubilee Life Insurance Company Limited 1,000,000 10,000,000 Pak Asian Fund Limited 1,000,000 10,000,000 Pakistan Kuwait Investment Company (Pvt.) Limited 1,000,000 10,000,000 The Bank of Khyber – Employees Gratuity Fund 1,000,000 10,000,000 Nestle Milkpak Limited Managerial Staff Pension Fund 800,000 8,000,000 Muslim Commercial Financial Services (Pvt.) Limited 650,000 6,500,000 Ample Securities (Pvt.) Limited 500,000 5,000,000 Askari General Insurance Co. Limited 500,000 5,000,000 B.R.R. International Modaraba 500,000 5,000,000 Capital One Equities Limited 500,000 5,000,000 Crescent Commercial Bank Limited 500,000 5,000,000 First National Bank Modaraba 500,000 5,000,000 First Standard Investment Bank Limited 500,000 5,000,000 Orix Investment Bank Pakistan Limited 500,000 5,000,000 Paramount Leasing Limited 500,000 5,000,000 Sapphire Fibres Limited 500,000 5,000,000 Sapphire Textile Mills Limited 500,000 5,000,000 Saudi Pak Leasing Company Limited 500,000 5,000,000 SC Securities (Pvt.) Limited 500,000 5,000,000 Trust Leasing Corporation Limited 500,000 5,000,000 Adamjee Insurance Company Limited 400,000 4,000,000 Attock Cement Pakistan Limited Pension Fund 400,000 4,000,000 Nestle Milkpak Limited Employees Gratuity Fund 400,000 4,000,000 Hino Pak Motors Limited Employees Gratuity Fund 300,000 3,000,000 Hino Pak Motors Limited Employees Pension Fund 300,000 3,000,000 Khawaja Imtiaz Ahmed (Member Lahore Stock Exchange) 300,000 3,000,000

Aziz Fidahusein & Company (Pvt.) Limited 250,000 2,500,000

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International General Insurance Company of Pakistan Limited 250,000 2,500,000

Mr. Habibullah Sheikh (Member Lahore Stock Exchange) 200,000 2,000,000

Honda Atlas Cars (Pakistan) Limited Employees Gratuity Fund 200,000 2,000,000

Security General Insurance Company Limited 200,000 2,000,000 Mr. Arif H. Yousuf Saya (Member Karachi Stock Exchange) 150,000 1,500,000

Mr. Yasir Mehmood (Member Lahore Stock Exchange) 150,000 1,500,000

Attock Cement Pakistan Limited Gratuity Fund 100,000 1,000,000 MCB Employee Foundation 100,000 1,000,000 Moosani Securities (Pvt.) Limited 100,000 1,000,000 Khawaja Sami Rasheed (Member Lahore Stock Exchange) 100,000 1,000,000

Tri-Pack Films Limited Employees Gratuity Fund 100,000 1,000,000 Total 200,000,000 2,000,000,000

The Investment Adviser and the Pre-IPO Investors have subscribed to the Certificates of Rs. 2,000 million comprising 200 million Certificates of Rs. 10/- each as confirmed by the Auditor’s Certificate in Paragraph XVI.

5.3 Opening and Closing of Subscription List

THE SUBSCRIPTION LIST WILL OPEN “INSHA-ALLAH” AT THE COMMENCEMENT OF BANKING HOURS ON MAY 14, 2004 AND WILL CLOSE ON MAY 15, 2004 AT THE CLOSE OF BANKING HOURS.

5.4 Underwriting

The present offer of 100,000,000 certificates of the face value of Rs.10 per certificate has been fully underwritten as under:

S. No.

Name of Underwriters No. of Certificates

Total (Rupees)

1. East West Insurance Company Limited 15,000,000 150,000,000 2. Bolan Bank Limited 12,500,000 125,000,000 3. Bank AlFalah Limited 6,000,000 60,000,000 4. Jahangir Siddiqui & Company Limited 6,000,000 60,000,000 5. Jahangir Siddiqui Investment Bank Limited 6,000,000 60,000,000 6. EFU General Insurance Limited 4,500,000 45,000,000 7. EFU Life Assurance Limited 4,500,000 45,000,000 8. Al Zamin Leasing Modaraba 3,000,000 30,000,000 9. Crescent Commercial Bank Limited 3,000,000 30,000,000 10. Faysal Bank Limited 3,000,000 30,000,000 11. National Investment Trust Limited 3,000,000 30,000,000 12. PICIC Commercial Bank Limited 3,000,000 30,000,000

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13. Saudi Pak Commercial Bank Limited 3,000,000 30,000,000 14. First Dawood Investment Bank Limited 2,000,000 20,000,000 15. Fidelity Investment Bank Limited 1,500,000 15,000,000 16. Invest Capital & Securities (Pvt.) Limited 1,500,000 15,000,000 17. Javed Omar Vohra & Company Limited 1,500,000 15,000,000 18. Pak Oman Investment Company (Pvt.) Limited 1,500,000 15,000,000 19. Pakistan Industrial Credit & Investment

Corporation Limited 1,500,000 15,000,000

20. Pakistan Kuwait Investment Company Limited 1,500,000 15,000,000 21. Prime Commercial Bank Limited 1,500,000 15,000,000 22. Security Investment Bank Limited 1,500,000 15,000,000 23. Security Leasing Corporation Limited 1,500,000 15,000,000 24. Soneri Bank Limited 1,500,000 15,000,000 25. Union Bank Limited 1,500,000 15,000,000 26. First Standard Investment Bank Limited 1,250,000 12,500,000 27. Noman Abid & Company Limited 1,000,000 10,000,000 28. ORIX Leasing Pakistan Limited 1,000,000 10,000,000 29. Network Leasing Corporation Limited 1,250,000 12,500,000 30. Ali Hussain Rajabali Limited 500,000 5,000,000 31. Amin Siddique Parekh Securities (Pvt.) Limited 500,000 5,000,000 32. Aziz Fidahusein & Company (Pvt.) Limited 500,000 5,000,000 33. Crescent Leasing Corporation Limited 500,000 5,000,000 34. First Equity Modaraba 500,000 5,000,000 35. Saudi Pak Leasing Company. Limited 500,000 5,000,000 36. Sigma Leasing Corporation Limited 500,000 5,000,000 37. Guardian Modaraba 250,000 2,500,000 38. Moosani Securities (Pvt.) Limited 250,000 2,500,000 39. Munaf Sattar Securities (Pvt.) Limited 250,000 2,500,000 40. Paramount Leasing Limited 250,000 2,500,000 Total 100,000,000 1,000,000,000

If and to the extent, certificates hereby offered are not subscribed and paid for in cash in full by the closing of the subscription date, the Underwriters shall within 15 days of being duly called upon by the Issuer to do so, subscribe and pay for or procure subscribers to subscribe and pay for in cash in full those certificates not subscribed, in proportion of their underwriting commitments. In the opinion of the Issuer, the resources of the Underwriters are sufficient to discharge their underwriting commitments.

5.5 No Buy Back/ Repurchase Agreement

(a) The Underwriters have not entered into any buy back/ repurchase agreement with the Investment Adviser or any other person in respect of this Issue.

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(b) Non-Provisioning of Certificate by the Underwriters Certificate by the underwriters, as required under clause 30-B of section 2 of Part-I of the Second Schedule to the Companies Ordinance, 1984, has not been provided. The said clause stipulates that the underwriters shall certify that to the best of their knowledge, information and belief, the Offering Document constitutes full, true and plain disclosure of all the material fact relating to the Public Issue of Certificates offered through the Offering Document.

5.6 Option to IFC

To encourage and promote foreign investment in the Pakistani Capital Markets, ABAMCO Limited has offered an option to International Finance Corporation (IFC) under which they would be able to subscribe to the certificates of ABAMCO Composite Fund up to an amount of Rupees 400 million. The details of the option to IFC as required under clause 8 of Part I of the Second Schedule of the Companies Ordinance are as follows:

(a) The option would be exercisable within a period of three months from the date of the formal listing of the certificates of ABAMCO Composite Fund on the Karachi Stock Exchange;

(b) IFC would acquire the certificates of ABAMCO Composite Fund up to an

amount of Rupees Four Hundred Million at par value, i.e. Rs. 10/- per certificate within the time period mentioned in (a) above;

(c) The certificates will not be offered to IFC for any consideration other than cash;

(d) If IFC does not avail the option offered within the time period stipulated, this

option would lapse.

(e) The address of IFC is as given below: International Finance Corporation 2 A, Shahrah-e-Jamhooriat Ramna 5 (G – 5/1) Islamabad

5.7 Investor Eligibility

Any investor or any group of investors qualified or authorized to subscribe to purchase the Certificates may make applications for the issue of Certificates in ABAMCO Composite Fund. The onus for being so qualified lies with the investor and neither the Investment Adviser, nor the Trustee, nor the Registrar accepts any responsibility in this regard. Application may be made pursuant to the procedures described in paragraph below including but not limited to: (1) Citizens of Pakistan resident in Pakistan

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(2) Companies, corporate bodies, financial institutions, bank, partners of a firm and societies incorporated in Pakistan so long as such investment in permitted under their respective memorandum and articles of association and/ or bye-laws. In respect of trusts the trustees of such trust may make an application to subscribe the Certificates.

(3) Pakistanis resident abroad, foreign nationals and companies/ banks incorporated

outside Pakistan can apply for Certificates through the domestic bankers to the issue, subject to the regulations of the State Bank of Pakistan and the Government of Pakistan and any such regulations and laws that may apply to their place of residence, domicile and citizenship. These applicants shall be treated equal to domestic applicants in the allotment of Certificates and their Certificates, when issued, shall also rank pari passu with all other Certificates for all distribution subject to the relevant taxation and exchange regulations/laws. Any person making an application for the issue of Certificates in ABAMCO Composite Fund shall be deemed to have warranted that he is duly authorized to purchase such Certificates.

5.8 Basis of Allotment of Certificates

The basis and conditions of allotment shall be as follows:

(1) Application for the Certificates below the total value of Rs.5,000/- shall not be entertained.

(2) Application for certificates must be made for 500 certificates or in multiples

thereof.

(3) An applicant will be entitled to apply in one category of application only.

(4) If the Certificates to be issued to the general public are sufficient for the purpose, all applications shall be accommodated.

(5) If the issue is oversubscribed in terms of number of applications and amount,

the distribution shall be made by computer balloting, in the presence of representatives of the stock exchanges.

(6) In case of over subscription of amount only, then all applications shall be

accommodated initially for 500 certificates and the balance shall be allotted on pro-rata basis to applicants who have applied for certificates in multiples of 500 certificates.

5.9 Refund of Subscription Money to Unsuccessful Applicants

The Investment Adviser shall take a decision within ten (10) days of the closure of subscription list as to which applications have been accepted or are successful and refund the money in cases of unaccepted or unsuccessful applications within ten (10) days of the date of such decision as required under the provision of section 71 of the Companies Ordinance, 1984.

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As per sub section (2) of section 71 of the Companies Ordinance, if the refund is not made within ten days as required by sub section (1) of section 71 of the Companies Ordinance is not made within the time specified therein, the Investment Adviser of the Fund shall be jointly and severally liable to repay the money with surcharge at the rate of one and half percent, for every month or part thereof from the expiration of the 15 day and in addition, to a fine not exceeding Rs. 5,000/- and in case of a continuing offence to a further fine not exceeding Rs.100/- for every day after the said 15th day on which the default continues. Provided that the Investment Adviser shall not be liable if he proves that the default in making the refund was not due to any misconduct or negligence on his part.

5.10 Issues and Dispatch of Certificates

The Fund will dispatch physical Certificates to successful applicants or credit the respective CDS account within thirty (30) days of the date of subscription, in compliance with the requirement of the Stock Exchanges. Certificates will be issued either in scrip-less form (in the Central Depository System) or in the shape of physical scrip on the basis of option exercised by the successful applicants. Certificates in physical scrips shall be dispatched to the bankers to the Issue for onward delivery to successful applicants, whereas scrip less certificates shall be directly credited through book entries into the respective CDS account of the successful applicants maintained with the Central Depository Company of Pakistan Limited (CDC). The applicants who opt for the issuance of certificates in scripless form in the CDS should fill in the relevant columns of the Application form. In order to exercise the scripless option, the applicant must also have a CDS account at the time of subscription date.

5.11 Transfer of Certificates

(a) Physical Certificates:

The Investment Adviser of the Fund shall not refuse to transfer any fully paid certificates unless the transfer deed for any reason is defective or invalid under the provisions of Section 77 of the Companies Ordinance, 1984. Provided that the Investment Adviser shall within thirty days from the date on which the instrument of transfer was lodged with it, notify the defect or invalidity to the transferee who shall, after the removal of such defect or invalidity be entitled to re-lodge the transfer deed with the Fund.

(b) Transfer under book entry system:

The Certificates maintained within the Central Depository System (the “CDS”) in the book entry form shall be transferred in accordance with the provisions of

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the Central Depositories Act, 1997 and the Central Depository Company (CDC) of Pakistan Limited Regulations.

5.12 Principal Purpose for Issuance of Certificates

The purpose of this offering is to invite the general public to participate in the ownership of the Fund so that the general public can share in the development of the capital markets and also to avail the benefit of lower income tax rate.

5.13 Interest of Certificate Holders/ Investment Adviser/ Underwriter/ Bankers to the Issue

None of the holders of the issued certificates of the Fund have any special or other interest in the property or profit of the Fund other than that as holders of Certificates in the capital of the Fund except for the following:

(a) Investment Adviser/ Underwriter/ Bankers to the Issue….

(i) Investment Adviser to the scheme interested in remuneration of the Investment Adviser ABAMCO Limited

(ii) Underwriters of the Issue interested in underwriting commission

Please refer to paragraph 5.4 for the names of the underwriters interested in the underwriting commission.

(iii) Bankers to the Issue interested in the banking commission 1. ABN AMRO Bank 2. Allied Bank of Pakistan Limited 3. Bank Al Habib Limited 4. Bank AlFalah Limited 5. Bolan Bank Limited 6. Crescent Commercial Bank Limited 7. Faysal Bank Limited 8. Habib Bank AG Zurich 9. Jahangir Siddiqui Investment Bank Limited 10. Metropolitan Bank Limited 11. Muslim Commercial Bank Limited 12. National Bank of Pakistan 13. PICIC Commercial Bank Limited 14. Soneri Bank Limited 15. The Bank of Khyber 16. The Bank of Punjab 17. United Bank Limited

5.14 Right Certificates

The Investment Adviser may decide to offer Right Certificates to the existing Certificate Holders at a subscription price not higher than the Net Asset Value (NAV) of the closed-end scheme at the close of business day on the date of renunciation of the

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Certificates, subject to the approval of majority Certificate Holders in their meeting and subsequent approval by SECP. Twenty one (21) days notice shall be given to the Certificate Holders for holding such meeting.

5.15 Conversation of Fund in to Open-end Fund The Investment Adviser may convert the ABAMCO Composite Fund into an open-end fund with the approval of the Certificate Holders by a Resolution, the Trustee and the SECP, after fulfilling such conditions as are applicable to an open-ended scheme and on conditions which SECP may impose. However, the Investment Adviser shall hold a General Meeting of the Certificate Holders on September 21, 2009 to vote on a special resolution to convert the closed end fund in to an open end fund. The decision to convert the fund would be based on the affirmative vote of there fourth majority if the Certificate Holders. However, the Investment Adviser may convert the Closed-end Scheme into an open-ended scheme after approval of SECP, if the Certificates are quoted at one-third below its NAV, as announced under Rule 58(6) of the Rules for a consecutive period of one year or for fifteen months out of previous two years.

5.16 Merger with other Closed-end Funds

ABAMCO Composite Fund may, subject to the approval of the Certificate Holders by Resolution and approval of the SECP, merge with any other closed-end scheme or investment company, provided that it is strictly on the basis of Net Asset Value.

PART VI- NO MONEY SHALL BE PAID TO THE INTERMEDIARY EXCEPT THE CERTIFICATE HOLDER OR HIS AUTHORIZED REPRESENTATIVE PART VII – DISTRIBUTION POLICY 7.1 Distribution Policy

At least 90% of the income, excluding realised and unrealised capital gains received by ABAMCO Composite Fund reduced by such expenses as are chargeable to the Fund under the Rules, will be distributed annually, as dividend and the balance of income will be retained for re-investment. The entire amount available for distribution will be distributed as cash dividend. The Investment Adviser may also distribute a portion of realised capital gains. It may be noted that the income from capital gains varies from year to year, depending upon the situation prevailing in the stock market. In a financial year when income from this source is high, the Investment Adviser may retain a portion of this income, which in its judgement is reasonable for distribution in a lean year. The Investment Adviser will also ensure that distribution out of capital gains does not dilute the portfolio. The dilution can take place if an investment, which has been kept for a number of years, as growth investment is realised and the capital gains is distributed. In such cases the Investment Adviser may retain such capital gains and reinvest the proceeds, so that the portfolio does not get diluted. ABAMCO Composite Fund shall

36

comply with regulatory and taxation requirements and the dividend policy may be amended accordingly.

The Management Company may decide to distribute, wholly or in part, the distributable income in the form of a stock dividend, which would comprise of Bonus Certificates of the Fund. The Bonus Certificates would rank pari passu as to their rights in the net assets, earning and the receipt of the dividends and distributions, with the existing Certificates of the Fund from the date of issue of the Bonus Certificates.

7.2 Eligibility for Dividend

The right Certificates shall rank pari passu with the existing Certificates of the Fund as to their rights in the net assets, earnings, and the receipt of the dividends and distributions.

7.3 Withholding Tax on Dividends

Unless exempt from such taxation by applicable law or double taxation treaties, the withholding tax on profit distribution by the Fund will be as under:

Public companies including Insurance Companies: 5%;

Others: 10%

In terms of the provisions of section 5 read with section 8 of the Income Tax Ordinance, 2001, the withholding tax deducted at source on dividend would be final tax in respect of such income. However, under the provision of sub section 4 of Section 18 of the Income Tax Ordinance, 2001 any amount received by a bank or a non-banking finance company, where such amount represents distribution by a mutual fund out of its income from profit on debt, shall be chargeable to tax at normal tax rates.

7.4 Deduction of Zakat

Income distribution will be subject to deduction of Zakat at source pursuant to the provisions of Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

PART VIII – FEES AND CHARGES 8.1 Fees and Charges of ABAMCO Composite Fund

The following expenses will be borne by the Fund:

(a) Remuneration of the investment adviser and the trustee; (b) Brokerage and transaction costs relating to investing and disinvesting of the

Fund’s property; (c) All expenses incurred by the trustee effecting the registration of all registerable

property in the trustee’s name; (d) Legal and related costs as may be incurred in protecting or enhancing the

interests of the trust or the collective interests of the holders;

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(e) Bank charges and financial cost; (f) Audit fees; (g) CDC annual fee and custody charges; (h) SECP annual fee; (i) Listing fee, including renewals payable to stock exchanges; (j) Rating fee payable to an approved rating agency; (k) Formation costs; (l) Taxes if any applicable to the trust; and (m) Legal counsel fee and other related expenses.

8.2 Remuneration of the Investment Adviser

The Investment Adviser shall be entitled to receive an annual remuneration of an amount not exceeding three percent (3%) of the average monthly net assets for the first five years of the Scheme; and an annual remuneration of an amount not exceeding two percent (2%) of the average monthly net assets thereafter.

Notwithstanding the provisions of clause 8.2 of the offering Document, the Investment Advisor shall receive an annual remuneration of an amount not exceeding two percent (2%) of the average monthly net assets of the Scheme.

8.3 Remuneration of the Trustee

The Trustee shall be entitled to a monthly remuneration out of the Deposited Property based on actual custodial charges/ expenses and an annual tariff based on the following slab rates:

Amount of Funds under management (Average Monthly Net Assets)

Tariff per Annum

Up to Rupees 250 million 0.2% per annum On amount exceeding Rs. 250 million up to Rs 500 million:

Rs. 500,000 plus 0.15% per annum on amount exceeding Rs. 250 million

On amount exceeding Rs. 500 million up to Rs. 2,000 million:

Rs. 875,000 plus 0.08% per annum on amount exceeding Rs. 500 million;

On amount exceeding Rs. 2,000 million up to Rs. 5,000 million

Rs. 2,075,000 plus 0.06% per annum on amount exceeding Rs. 2,000 million;

On amount exceeding Rs. 5,000 million Rs. 3,875,000 plus 0.05% per annum on amount exceeding Rs. 5,000 million;

8.4 Expenses of the Investment Adviser and the Trustee

The payment to Custodian, (if any) will be made by the Trustee and the payment to Registrar will be made by the Investment Adviser and there will be no separate charge on the Deposited Property of ABAMCO Composite Fund.

The Investment Adviser and Trustee shall bear all expenditures in respect of their secretarial and office space and professional management including all accounting and administrative services provided in accordance with the provisions of the Trust Deed. Neither the Investment Adviser nor the Trustee shall make any charge against the

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Certificate Holder nor against the Deposited Property nor against the Distribution Account for their services nor their expenses, except such expenses as are expressly authorized under the provisions of the Rules and the Trust Deed to be payable out of Deposited Property.

8.5 Preliminary and Floatation Expenses

The expenses of this Issue inclusive of underwriting commission, commission to the bankers to the issue and brokerage to the members of the stock exchanges will not exceed 1% of the paid up capital of the Fund and will be borne by the Investment Adviser and shall be reimbursable by the Fund in equal amounts paid annually over a period of not less than five years.

Break-up of these expenses is as follows: Expenses Rupees Underwriting commission* ** 7,500,000 SECP Fee 25,000 Bankers to the Issue commission* 2,970,000 Stock Exchanges Listing Fee 3,185,000 CDC issuer fee 267,500 Broker commission on issue of certificates 10,000,000 Legal & professional charges 500,000 Other expenses including advertising, publication, printing of Offering Documents, computer services, etc, 5,552,500

Total 30,000,000 * Represents maximum possible expenses under these heads. ** Take up commission at the rate of 0.75% shall be paid at actual take up of

certificates Note: Estimates of expenses may be adjusted under one head or another; however the total expenses shall not exceed Rs. 30,000,000. 8.6 Underwriting Commission

The Investment Adviser has paid the Underwriters an initial underwriting commission @0.75% on account of the Fund on the amount underwritten. In addition the Underwriters shall be paid by the Investment Advisers an additional take-up commission @0.75% in respect of Certificates actually taken up by them in accordance with their underwriting commissions.

8.7 Commission to the Bankers to the Issue

A commission at the rate of 0.25% of the amount collected on allotment in respect of successful applicants plus out of pocket expenses, if any, will be paid by the Investment Adviser on account of the Fund to the bankers to the issue for services to be rendered by them in connection with this issue. No commission shall be paid to the bankers in

39

respect of Certificates taken up by the Underwriters by the virtue of their underwriting commitments.

8.8 Brokerage

Brokerage will be paid by the Investment Adviser to the members of the Karachi Stock Exchange (Guarantee) Limited, Lahore Stock Exchange (Guarantee) Limited and Islamabad Stock Exchange (Guarantee) Limited at the rate of 1.0% of the value of Certificates actually sold through them. No brokerage shall be paid to the members in respect of Certificates taken up by the Underwriters by virtue of their underwriting commitments, or in respect of Certificates issued under the green shoe option.

PART IX – DETAILS OF EXEMPTIONS AND TAXES LEVIED ON ABAMCO

COMPOSITE FUND

The Information herein below is accurate as of the date of the printing of this offering document. The taxability and tax rates are subject to change from time to time, as may be announced by the Government. 9.1 Taxation

Provision for current taxation may be based on taxable income at current tax rates after taking into account tax rebates and tax credits available, if any.

9.2 Taxation on the Income of the ABAMCO Composite Fund

The following is a brief description of the Income Tax Law (Income Tax Ordinance 2001) applicable in respect of ABAMCO Composite Fund.

(a) Liability for Income Tax

Under the Income Tax law in Pakistan, ABAMCO Composite Fund is regarded as a public company for tax purposes. The income of ABAMCO Composite Fund is taxable at the tax rate applicable to a public company, which is presently as under:

a. Dividend income - 5%. b. Capital gains arising on sale of securities listed on any stock exchange in

Pakistan - exempt from tax up to June 30, 2005. c. Return from all other sources/ instruments are taxable at the rate of 35%,

applicable to a public company.

(b) Liability for income tax, if 90% of income is paid as dividend

Notwithstanding the tax rates and withholding tax stated under (a) above, the income of ABAMCO Composite Fund will be exempted from tax, if not less

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than 90% of the income of the year, is distributed amongst the Certificate Holders as dividend. The 90% of the income shall be calculated after excluding realized capital gains and capital appreciation. The ABAMCO Composite Fund will comply with the requirement of tax exemption and distribute at least 90% of the income, calculated after excluding realized capital gains as dividend.

(c) Withholding tax

All income; namely, dividend, return from term finance certificates or corporate papers, profit on government securities, return on deposits/ certificates of investment with banks/ financial institutions, profits from money market transactions, profit from Profit or Loss sharing accounts with banks of ABAMCO Composite Fund will not be subjected to any withholding tax.

(d) Zakat

ABAMCO Composite Fund is Saheb-e-nisab under Zakat and Ushr Ordinance, 1980. The balance in the credit of Savings Bank Account, or similar account with a Bank standing on 1st day of Ramazan-ul-Mubarak will be subjected to deduction of 2.5% Zakat.

9.3 Taxation on Certificate Holders and Liability of Zakat

The information set forth below is included for general information purposes only. In view of the individual nature of tax consequences, each investor is advised to consult with his tax adviser with respect to the specific tax consequences to him of investing in ABAMCO Composite Fund.

(i) Income tax: Dividend paid to Certificate Holders of ABAMCO Composite Fund will be subject to income tax as under according to the present rates, which may be changed in future:

Income Tax Withholding Tax

(1) Public Company and Insurance Company 5% 5%

(2) Others 10% 10%

Exemption from Capital Gains: Capital gains derived from the sale of listed securities are presently not liable to Income tax pursuant to clause (116) of part 1 of the Second Schedule of the Income Tax Ordinance, 2001. This exemption is presently available up to income year ending June 30, 2005. Hence the portion of dividend paid out of capital gains on sale of listed securities will not be subject to income tax and withholding tax. In terms of the provisions of section 5 read with section 8 the Income Tax Ordinance, 2001, the withholding tax deducted at source on dividend would be

41

final tax in respect of such income. However, under the provisions of sub section 4 of Section 18 of the Income Tax Ordinance, 2001 any amount received by a bank or a non-banking finance company, where such amount represents distribution by a mutual fund out of its income from profit on debts, shall be chargeable to tax at normal tax rates.

(ii) Tax Credit: Certificate Holders shall be entitled to a tax credit under section 62

(1) and (2) of the Income Tax Ordinance 2001 in respect of the cost of acquiring in the year new shares offered to the public by a public company (ABAMCO Composite Fund) listed on a stock exchange in Pakistan where the certificate holder is the original allottee of the shares. The amount on which tax credit will be allowed shall be lower of (a) amount invested; (b) ten percent of the total income of the Certificate Holder; and (c) Rupees One Hundred Thousand and will be calculated by applying the average rate of tax of the Unit Holder for the tax year. If the certificates so allotted are disposed within 12 months, the amount of tax payable for the tax year shall be increased by the amount of the credit allowed.

(iii) Zakat: Units held by resident Pakistani Unit Holders shall be subject to Zakat at 2.5% of the Par Value of Units under Zakat and Ushr Ordinance, 1980, (XVII of 1980), except those exempted under the said Ordinance. Zakat will be deducted at source from the dividend amount.

Disclaimer: The tax and Zakat information given above is based on the Investment Adviser tax adviser’s interpretation of the law, which to the best of the Investment Adviser understanding is correct but Investors are expected to seek independent advice so to determine the tax liability arising from their investment in the Certificates of the Fund.

PART X – REPORTS AND ACCOUNTS

10.1 Accounting Period

The Accounting Period will commence from the date of registration of ABAMCO Composite Fund for the first period and from July 1, for all the following years to June 30

10.2 Revenue Recognition

(i) Realized gain/ losses on investment: Sales and purchases of marketable securities shall be recognized on the date of contract. Capital gains and losses on the sale of marketable securities shall be taken to income of the year in which these arise.

(ii) Dividend/ Return: Dividend income shall be recognized at the time of closure of

shares transfer books of the company declaring dividend and return on securities other than shares shall be recognized on time proportion basis. Profit on bank deposits shall be recognised on accrual basis.

(iii) Brokerage and underwriting commission: Brokerage and underwriting

commission shall be accrued as and when due.

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10.3 Valuation of Property Method

(a) A security listed on a stock exchange shall be valued at its last sale price on such exchange on the date as of which it is valued, or if such exchange is not open on such date, then at its last sale price on the next preceding date on which such exchange was open and if no sale is reported for such date, the security shall be valued at an amount not higher than the closing asked price nor lower than the closing bid price;

(b) An investment purchased and awaiting payment against delivery shall be included

for valuation purposes as a security held, and the cash account of the Fund shall be adjusted to reflect the purchase price, including brokers commission and other expenses incurred in the purchase thereof but not disbursed as of the valuation date;

(c) An investment sold but not delivered pending receipt of proceeds shall be valued

at the net sale price;

(d) The value of any dividends, bonus shares or rights which may have been declared on securities in the portfolio but not received by the Fund as of the close of business on the valuation date shall be included as assets of the Fund, if the security upon which such dividends, bonuses or rights were declared is included in the assets and is valued ex-dividend, ex-bonus or ex-rights as the case may be;

(e) A security not listed or quoted on a stock exchange shall be valued at investment

price or its break up value as per last audited accounts, whichever is later;

(f) Mark-up accrued on any mark-up bearing security in the portfolio shall be included as an asset of the Fund, if such accrued interest is not otherwise included in the valuation of the security;

(g) Any other income accrued up to the date on which computation was made shall

also be included in the assets;

(h) All liabilities, expenses, taxes and other charges, including Annual Fee due or accrued up to the date of computation which are chargeable under the Rules, other than the paid-up capital of the Fund, shall be deducted from the value of the assets; and

(i) The remuneration accrued up to the date of computation payable to the

Investment Adviser, for providing management and other services, shall be included as an expense.

(j) For any asset class where no specific method of valuation is prescribed in the

Rules, the guidance from SECP shall be obtained and valuation shall be done accordingly.

10.4 Accounting Method

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The accounts will be prepared in accordance with the International Accounting Standards issued by the International Accounting Standards Committee (IASC) as adopted in Pakistan and the requirements of the Companies Ordinance, 1984 and NBFC Rules.

(i) Marketable Securities

The Fund will adopt International Accounting Standards (IAS) through which Investments will be classified as held for trading, held to maturity and available for sale. Held for trading and available for sale Investments will be measured at fair value being their market value at balance sheet date. The resulting gain or loss may be included in profit and loss for the period whereas cost may be calculated on moving average basis. Held to Maturity Investments which have a fixed maturity shall be measured ay amortised cost and those investments that do not have a fixed maturity shall be measured at cost.

Classification of investments may be made based on the intended purpose of holding such investments, which are as follows:

a) Securities held for trading

These are investment securities, which are acquired principally for the purpose of generating profit, from short-term fluctuations in price.

b) Securities held to maturity

These are investment securities with fixed or determinable payments and fixed maturity

c) Securities available for sale

These are investments, which do not fall under the “held for trading” or “held to maturity” categories.

10.5 Foreign Currencies

Foreign currencies transactions may be translated into Pak rupees at the rate of exchange prevailing on the date of each transaction. Assets and liabilities denominated in foreign currencies may be translated into Pak rupee at the rate of exchange ruling on the balance sheet date. Exchange differences may be included in income currently.

PART XI – REPORTS TO THE CERTIFICATE HOLDERS

11.1 The Investment Adviser, subject to the provisions of the Rules and applicable listing

regulations, shall:

(a) Within four months of closing of the Accounting Period, prepare and transmit the annual report together with a copy of the balance sheet, income and expenditure account together with the Auditor’s report for the Accounting Period to the SECP and Holders in accordance with the Rules.

44

(b) Within two months, or any such period as permitted by the SECP, after the close of the first half of its year (second quarter) of account, prepare and transmit to the Holders and the SECP a profit and loss account for and balance sheet as at the end of that half year, whether audited or otherwise, in accordance with the Rules.

(c) Within a thirty days after the close of the first and third quarter of account,

prepare and transmit the quarterly report to the Holders and the SECP a profit and loss account for and the balance sheet as at the end of that quarter, whether audited or otherwise, in accordance with the Rules.

11.2 Such report, so far as may be applicable, shall be in accordance with requirements laid

down in clauses (e), (f) and (h) of rule 34 of the Rules and shall contain a statement showing the shares/securities certificates owned at the beginning of the relevant period, share purchased or sold during such period, and the shares/securities held at the end of such period together with the value (at cost and at market), and the percentage in relation to its own assets and the paid-up capital of the company whose certificates shares/ securities are owned.

11.3 The statement of income and expenditure of the Closed-end Scheme shall include a statement of income and expenditure of the investment adviser in relation to the Fund.

PART XII – WARNINGS

12.1 Prospective investors should consult their investment adviser, stockbroker, bank

manager, legal adviser or other financial adviser, if they have any doubt about the contents of this Offering Document.

12.2 Investors may realize that all investments involve risk. It should be clearly

understood that the portfolio of ABAMCO Composite Fund is subject to market fluctuations and risks inherent in all such investments. The value of the certificates of ABAMCO Composite Fund may appreciate as well as depreciate, as well as the level of dividend declared by ABAMCO Composite Fund may go down as well as up. The prices of ABAMCO Composite Fund are neither assured nor managed and are market determined.

PART XIII – GENERAL INFORMATION

13.1 LIST OF DOCUMENTS AND WHERE THEY CAN BE INSPECTED

All documents concerning the Closed-end scheme, as given in paragraph 1.6, may be inspected at the registered office of the ABAMCO Limited, at 1306-1307, Chapal Plaza, Hasrat Mohani Road, Karachi-74000 or at any other address which may be notified by Investment Adviser to the general public through newspapers.

13.2 DATE OF PUBLICATION OF OFFERING DOCUMENT/ PROSPECTUS The date of publication of offering document/ prospectus is May 7, 2004.

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13.3 INVESTMENT ADVISER ACCEPTS RESPONSIBILITY FOR THE INFORMATION GIVEN IN THIS DOCUMENT

ABAMCO, as the Investment Adviser, accepts the responsibility for the information contained in this Offering Document as being accurate at the date of publication.

PART XIV – TERMINATION OF THE CLOSED-END SCHEME 14.1 ABAMCO Composite Fund may be terminated in accordance with the conditions

specified in the Rules or under any other agreement or arrangement entered into between the Trustee and Investment Adviser regarding the Trust.

14.2 ABAMCO Composite Fund shall be terminated, if the Fund has under-performed the

market for two consecutive years whereby the growth in the Fund’s NAV remains less than seventy five percent of the growth in KSE All Share Index. The Fund may also be terminated if it has not paid dividends and/or issued bonus certificates for two consecutive years or if the Fund’s NAV has fallen to forty percent or lower than the face value of the Certificates for a period of twelve months out of the last 24 months provided the above are not due to prolong downturns in the stock exchanges, as may be determined by SECP. If anyone of the above happens then the Fund shall be wound up / terminated. In such a situation conversion to open end fund shall not be allowed.

14.3 The termination of the Trust shall always require the prior written approval of SECP. PART XV – APPLICATION AND ALLOTMENT INSTRUCTIONS

15.1 Name(s) and address(es) must be written in full, in block letters, in English and should

not be abbreviated. All applications must bear the signature and address corresponding with that recorded with the bank in that account. In case of difference of signature with the bank and the National Identity Card/ Power of Attorney (as the case may be), both signatures should be affixed on the application form.

15.2 APPLICATION MUST BE MADE ON THE FUND’S PRINTED FORM OR A LEGIBLE PHOTOCOPY THEREOF.

15.3 The applicants opting for scripless form of security are required to complete the

relevant sections of the application. In case of discrepancy between the information provided in the application form and the information already held by CDS, the Offerer reserves the right to issue Certificates in physical form.

15.4

a) In case of individual investors, an attested copy of National Identity Card/ Passport (in case of overseas Pakistanis) should invariably be enclosed and the number indicated against the name(s) of applicant(s), except in case of the application field by the Investment Corporation of Pakistan on behalf of their account holders/ investors. Copy of the National Identity Card/ Passport can be attested by any Federal/ Provincial Government Gazetted Officer, Councillor, Bank Manager, Oath Commissioner or Head Master of High School etc.

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b) Original National Identity Card, along with one attested photocopy, must be produced for verification, to the branch at the time of presenting an application. The attested photocopy will, after verification, be retained by the bank branch along with the application.

15.5

a) Applications made by companies, corporate bodies, provident/ pension/ gratuity funds/ trusts and other legal entities must be accompanied by a copy of their Memorandum and Articles of Association or equivalent instrument/document. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copy of such documents can be attested by any Federal/ Provincial Government Gazetted Officer, Councillor, Bank Manager, Oath Commissioner or Head Master of High School etc.

b) Attested copies of the documents mentioned in paragraph (16.5a) above must be

produced for verification to the branch at time.

15.6 a) Application by foreign nationals and non-resident companies shall be accepted

subject to existing laws and provided the subscription amount is paid by means of a remittance through banking channels or through other means permitted by the State Bank of Pakistan. The application must be accompanied by a copy of their Passport for individuals or a copy of their Memorandum and Articles of Association or equivalent instrument/ document in case of a legal entity. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copy of such documents can be attested by a Federal/ Provincial Government Gazetted Officer, Councillor, Bank Manager, Oath Commissioner or Head Master of High School etc.

b) Attested copies of documents mentioned in paragraph (15.6a) above must be

produced for verification to the branch at time of presenting an application. The attested photocopy will, after verification, be retained by the bank branch along with the application.

15.7

a) Application for certificates must be for 500 Certificates or multiples of 500 certificates thereof. An applicant will be entitled to apply in one category only.

b) Application of certificates below the value of Rs. 5,000 shall not be entertained.

c) Certificates will be issued in lots of 500 certificates at Rs.10/-each.

d) Fictitious and multiple applications are prohibited and such application money shall

be liable to confiscation under section 18A of the Securities and Exchange Ordinance, 1969.

15.8

a) Subscription money must be paid by cheque/ drafts drawn on the applicant’s own account.

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b) Remittance for the full amount of Certificates at Rs.10/- per certificate must

accompany each application and must be forwarded to any one of the bankers to the offer named in the Offering Document. Payments should be in the form of cheques or drafts drawn payable to one of the bankers to the Offer A/C “CDC – TRUSTEE ABAMCO COMPOSITE FUND” and crossed, “A/C PAYEES ONLY” and must be drawn on a bank in the same town as the bank to which the application has been sent.

c) All application(s) must bear the signature and address corresponding with that

recorded with the bank in the applicant’s account.

d) Only one application will be accepted against each account. In case of joint accounts, one application will be accepted in the name of each of the joint account holders. No application will be accepted in the name of a person shown as minor in the records of the bank.

15.9 Copies of the Offering Document and application forms can be obtained from members

of the Karachi Stock Exchange (Guarantee) Limited, Lahore Stock Exchange (Guarantee) Limited and Islamabad Stock Exchange (Guarantee) Limited, the Bankers to the Issue and their branches and the registered office of the Investment Adviser (ABAMCO Limited).

15.10 Applications are not to be made by minors and persons of unsound mind. 15.11 Joint applications from more than four persons will not be accepted. In case of joint

applications each party must sign the application form and submit copies of attested National Identity Card/ Passport (in case of overseas Pakistanis & foreign nationals). The Certificates will be dispatched to the person whose name appears first on the application form while in case of CDS, it will be credited to the respective CDS account and where any amount is refundable, in whole or in part, the same will be refunded by cheque by post, or through the bank where the application was lodged, to the person named first on the application form, without interest, profit or return.

15.12 Banks are not allowed to make application for certificates of the value of Rs.5,000/- on

account of their constituents except in the case of overseas Pakistanis. Such applications will be made by the subscriber himself, complete in all respects and shall be certified by the Bank Manager as provided in the application from. Certificates in respect of such applications shall be issued in the name of the applicant and sent to the postal address stated in the application or the address of the bank through which the application was tendered, while in the case of CDS, it will be credited to the respective CDS account. These will not be issued in the name of aforesaid banking companies.

15.13 Applications for certificates above the total value of Rs.5,000/- may be made by banks/

members of the stock exchange on behalf of their constituents but must contain all the information in respect of each constituent on the application form. All such applications made by banks/ members of the stock exchanges must also be certified by the Bank Manager concerned as provided in the application form. Certificates in respect of such applications will be made in the name of the banks/ member of the stock exchanges on

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account of the constituent and the relevant Certificates and advice for refunds will be sent to the bank/stock exchange member concerned.

15.14 No receipt will be issued for payment made with the application but an

acknowledgement will be forwarded in due course either by issuance of Certificates in whole or in part or by return of the money paid with the application. The Bankers to the Offer will issue provisional acknowledgement for applications lodged with them. No interest or profit will be payable in respect of the refunded amount.

15.15 It would be permissible for a bank to refund subscription money to unsuccessful

applicants having an account in their bank by crediting such account instead of remitting the same by cheque, pay order or bank draft. Applicants should therefore, should not fail to give their bank account numbers.

15.16 Allotment shall be made in accordance with the instructions of the Securities &

Exchange Commission of Pakistan.

15.17 Application shall be subject to pre-ballot as well as post-ballot scrutiny. Applications which do not meet with the above requirements or applications which are incomplete will be rejected. Subscription money in respect of rejected application shall not be refunded without the approval of the Securities & Exchange commission of Pakistan.

15.18 In case of application made by a banker or Stock Exchange member, the banker or

stock exchange member shall obtain the certificate from the applicant(s) in terms of paragraph 3 of the application form and forward the same in original to the company with the application.

15.19 Making of any false statement in the application or will fully embodying incorrect

information therein will make the applicant or the bank liable to legal action.

15.20 Fictitious and multiple applications are prohibited and such application money shall be liable to confiscation under section 18A of the Securities and Exchange Commission of Pakistan.

15.21 The basis of allotment shall be as follows:

a) Application for shares by the general public, including individuals and institutions, must be made for 500 certificates or in multiples thereof. Application for certificates below the total value of Rs. 5,000/- shall not be entertained.

b) If the Certificates to be issued to the general public are sufficient for the

purpose, all applications shall be accommodated.

c) If the issue is oversubscribed in terms of number of applications and amount, the distribution shall be made by computer balloting, in the presence of representatives of the stock exchanges.

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d) In case of over subscription of amount only, then all applications shall be accommodated initially for 500 certificates and the balance shall be allotted on pro-rata basis to applicants who applied for certificates in multiples of 500 certificates.

e) Allotment of shares will be subject to scrutiny of applications for subscription.

f) In case of over subscription, ABAMCO Limited may exercise the green shoe

option, in part or whole, and offer additional certificates of an amount of Rupees 750 million.

BANKERS TO THE ISSUE

1. ABN AMRO Bank 2. Allied Bank of Pakistan Limited 3. Bank Al Habib Limited 4. Bank AlFalah Limited 5. Bolan Bank Limited 6. Crescent Commercial Bank Limited 7. Faysal Bank Limited 8. Habib Bank AG Zurich 9. Jahangir Siddiqui Investment Bank Limited

10. Metropolitan Bank Limited 11. Muslim Commercial Bank Limited 12. National Bank of Pakistan 13. PICIC Commercial Bank Limited 14. Soneri Bank Limited 15. The Bank of Khyber 16. The Bank of Punjab 17. United Bank Limited

CODE OF OCCUPATION 01 Business 02 Business Executive 03 Service 04 Housewife 05 Household 06 Professional 07 Student 08 Agricultural 09 Industrialist 10 Others PART XVI – FINANCIAL INFORMATION 16.1 Auditors Certificate on Investment Advisers and Pre-IPO Investors investment in

the Pre-IPO of ABAMCO Composite Fund.

AA/575/04 May 4, 2004 The Directors ABAMCO Limited, 1306-1307 Chapal Plaza, Hasrat Mohani Road, Karachi–74000. Dear Sirs, We confirm that on the basis of the bank statements and other information provided to us by ABAMCO Limited, a sum of Rs. 2,000,000,000 has been received/ banked in the bank accounts of “Trustee-ABAMCO Composite Fund” as subscription money for

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certificates of ABAMCO Composite Fund by various investors, a list of which is attached herewith. Based on the information given to us, we further confirm that the fund has not made any investments to-date.

Yours faithfully,

Ford Rhodes Sidat Hyder & Co. Chartered Accountants

“Attached List” ABAMCO Composite Fund

Name of Investor Rupees

ABAMCO Limited 410,000,000 The Bank of Punjab 200,000,000 Bolan Bank Limited 100,000,000 Motiwala Securities (Pvt.) Limited 100,000,000 Saudi Pak Industrial and Agricultural Co. (Pvt.) Limited 100,000,000 Askari Commercial Bank Limited 50,000,000 Askari Leasing Limited 50,000,000 East West Insurance Co., Limited 50,000,000 Metropolitan Bank Limited 50,000,000 Pakistan Industrial Credit and Investment Corporation Limited 50,000,000 PICIC Commercial Bank Limited 50,000,000 Muslim Commercial Bank Limited 32,500,000 Noman Abid & Company Limited 30,000,000 The Bank of Khyber 30,000,000 Jahangir Siddiqui Investment Bank Limited 28,000,000 A. R. Securities (Pvt.) Limited 25,000,000 Aqeel Karim Dhedi Securities (Pvt.) Limited 25,000,000 Atlas Investment Bank Limited 25,000,000 Bank Al Falah Limited 25,000,000 Escorts Investment Bank Limited 25,000,000 Habib Bank A G Zurich 25,000,000 Javed Omer Vohra & Company Limited 25,000,000 National Bank of Pakistan 25,000,000 Pak Oman Investment Co (Pvt.) Limited 25,000,000 Prime Commercial Bank Limited 25,000,000 Saudi Pak Commercial Bank Limited 25,000,000 Security Leasing Corporation Limited 25,000,000 Soneri Bank Limited 25,000,000 Union Bank Limited 25,000,000 Ibrahim Agencies (Pvt.) Limited 20,000,000 NBP Capital Limited 20,000,000 First Punjab Modaraba 15,000,000 Mr. Kausar Abbas Bhayani (Member Karachi Stock Exchange) 15,000,000

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Trust Investment Bank Limited 15,000,000 Al-Zamin Leasing Modaraba 10,000,000 Bank Al Habib Limited 10,000,000 EFU General Insurance Limited 10,000,000 EFU Life Assurance Limited 10,000,000 First International Investment Bank Limited 10,000,000 National Refinery Limited - Managerial & Supervisory Staff Pension Fund Trust 10,000,000

New Jubilee Insurance Company Limited 10,000,000 New Jubilee Life Insurance Company Limited 10,000,000 Pak Asian Fund Limited 10,000,000 Pakistan Kuwait Investment Company (Pvt.) Limited 10,000,000 The Bank of Khyber – Employees Gratuity Fund 10,000,000 Nestle Milkpak Limited Managerial Staff Pension Fund 8,000,000 Muslim Commercial Financial Services (Pvt.) Limited 6,500,000 Ample Securities (Pvt.) Limited 5,000,000 Askari General Insurance Co. Limited 5,000,000 B.R.R. International Modaraba 5,000,000 Capital One Equities Limited 5,000,000 Crescent Commercial Bank Limited 5,000,000 First National Bank Modaraba 5,000,000 First Standard Investment Bank Limited 5,000,000 Orix Investment Bank Pakistan Limited 5,000,000 Paramount Leasing Limited 5,000,000 Sapphire Fibres Limited 5,000,000 Sapphire Textile Mills Limited 5,000,000 Saudi Pak Leasing Company Limited 5,000,000 SC Securities (Pvt.) Limited 5,000,000 Trust Leasing Corporation Limited 5,000,000 Adamjee Insurance Company Limited 4,000,000 Attock Cement Pakistan Limited Pension Fund 4,000,000 Nestle Milkpak Limited Employees Gratuity Fund 4,000,000 Hino Pak Motors Limited Employees Gratuity Fund 3,000,000 Hino Pak Motors Limited Employees Pension Fund 3,000,000 Khawaja Imtiaz Ahmed (Member Lahore Stock Exchange) 3,000,000 Aziz Fidahusein & Company (Pvt.) Limited 2,500,000 International General Insurance Company of Pakistan Limited 2,500,000 Mr. Habibullah Sheikh (Member Lahore Stock Exchange) 2,000,000 Honda Atlas Cars (Pakistan) Limited Employees Gratuity Fund 2,000,000 Security General Insurance Company Limited 2,000,000 Mr. Arif H. Yousuf Saya (Member Karachi Stock Exchange) 1,500,000 Mr. Yasir Mehmood (Member Lahore Stock Exchange) 1,500,000 Attock Cement Pakistan Limited Gratuity Fund 1,000,000 MCB Employee Foundation 1,000,000 Moosani Securities (Pvt.) Limited 1,000,000 Khawaja Sami Rasheed (Member Lahore Stock Exchange) 1,000,000 Tri-Pack Films Limited Employees Gratuity Fund 1,000,000 Total 2,000,000,000

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PART XVII – DEFINITIONS

Unless the context requires otherwise the following words or expressions shall have the meaning respectively assigned to them viz.:

17.1 “Accounting Date” means in case of the final Accounting Period, the date on

which money required for the final distribution is transferred to the Distribution Account, and in any other case the thirtieth day of June in each year provided that the Investment Adviser, with the written consent of the Trustee, may change such date to any other date.

17.2 “Accounting Period” means a period ending on and including an Accounting

Date and commencing (in case of the first such period) from the date on which the Deposited Property is first paid or transferred to the Trustee and (in any other case) from the end of the preceding Accounting Period.

17.3 “Auditor” means the Auditor of the Trust appointed by the Investment Adviser.

17.4 “Authorized Investment” means Pakistan origin investments transacted, issued,

traded and listed inside or outside Pakistan and includes any of the following:

(a) Investments primarily in equity securities, shares and stocks of large-cap companies having market capitalisation of over Rupees one billion, bonds, debentures, debenture stock, warrant options, participation term certificates, modaraba certificates, musharika certificates, term finance certificates, preference shares, convertible preference shares, convertible bonds, Euro bonds, Global Deposit Receipts (GDR) and other asset backed or mortgage backed securities. Such investments shall include those for ready as well as those for future settlements;

(b) Treasury bills and other Government securities;

(c) Money Market instruments, Certificates of Deposit and Bankers’ Acceptances;

(d) Deposits in Banks or with financial institutions;

(e) Units in any unit trust schemes; (f) Any other equity or debt security in respect of which permission to deal on a

Stock Exchange is effective; (g) Investment on profit and loss basis in organizations and ventures; (h) Investment in any other equity or debt security that may or may not be listed on

the Stock Exchange;

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(i) Repurchase transactions (REPO’s) and reverse REPO’s including Carry Over Transactions (COT) Purchase or sale of a security for ready settlement and reverse thereof (sale or purchase, as the case may be) for future settlement; and

(j) Any other Investment(s), which is/ are in line with the basic investment

objectives of the Fund, with the approval of SECP.

but does not include bearer security or any other security that would involve the assumption of unlimited or undeterminable liability or any interest based security.

17.5 “Bank” means a banking company licensed under the Banking Companies

Ordinance, 1962 or any other regulation for the time being in force. 17.6 “Bank Accounts” means accounts maintained with a Bank, the beneficial

ownership of which vests in the Certificate Holder.

17.7 "Book Entry Certificates" means certificates which have been entered into the Central Depository System.

17.8 “Business Day” means a day on which Banks are open for business in Pakistan.

17.9 “Carry Over Transaction (COT)” means a form of financing through the Stock

Exchange consisting of two simultaneous transactions, the first for purchase of an underlying security (shares) on the following scheduled settlement date for the security and the second for selling back the security for a subsequent settlement date.

17.10 "CDC" means Central Depository Company of Pakistan Limited.

17.11 "Central Depositary System" means the central depositary system established

and operated by the CDC under section 4 of the Central Depositaries Act, 1997.

17.12 “Certificate” means one undivided share in the Trust.

17.13 “Certificate of Holding” shall also mean the definitive certificate acknowledging the number of certificates of the par value of Rs. 10/- registered in the name of the Holder issued at the request of the Holder pursuant to the provisions of this Deed.

17.14 “Companies Ordinance” means the Companies Ordinance, 1984, as amended

from time to time.

17.15 “Connected Person” shall have the same meaning as in the Rules.

17.16 “Constitutive Document” means the principal documents governing the formation of a closed end scheme and all related material agreements.

17.17 “Custodian” means a bank, as defined under the Rules, which may be appointed

by the Trustee with the approval of the Investment Adviser to hold and protect the Deposited Property or any part thereof as Custodian on behalf of the Trustee.

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17.18 “Deposited Property” means the Investments and all income, profit and other

benefits arising there from and all cash, bank balances and other assets movable or immovable and property of every description for the time being held or deemed to be held upon trust by the Trustee for the benefit of the Certificate Holders pursuant to this Deed but does not include any amount standing to the credit of the Distribution Account.

17.19 “Distribution Account” means the Bank Account, which may be current, saving

or deposit account, maintained by the Trustee with a Bank, approved by the Investment Adviser, in which the amount required for the distribution of income to the Holders shall be transferred.

17.20 “Duties and Charges” means in relation to any particular transaction or dealing

all stamp and other duties, taxes, Government charges, brokerage, bank charges, transfer fees, registration fees and other duties and charges whether in connection with the constitution of the Deposited Property or the increase or decrease of the Deposited Property on the sale or purchase of Investments or in respect of the issue, transfer, cancellation or replacement of a Certificate or otherwise which may have become or may be payable in respect of or prior to or upon the occasion of the transaction or dealing in respect of which such duties and charges are payable but do not include any commission charges or costs which may have been taken into account in ascertaining the Net Asset Value.

17.21 “Formation Cost” means all preliminary and floatation expenses of the Trust,

including expenses in connection with the authorization of the Scheme, execution and registration of the Constitutive Document, issue, circulation and publication of the Prospectus and all other expenses incurred during the Initial Offering Period.

17.22 "Holder" or "Holders" or "Certificate Holder" or "Certificate Holders" means

the Certificate Holder(s) for the time being entered in the Register as the owner of the Certificate, including jointly so registered, pursuant to the provisions of this Deed.

17.23 “Initial Period” or “Initial Offering Period (IPO)” means a period determined

by the Investment Adviser, during which the Certificates will be offered at the Par Value, in terms of the Prospectus.

17.24 “Investment” means any Authorized Investment forming part of the Deposited

Property.

17.25 “Net Assets”, in relation to the Trust, means the excess of assets over liabilities of the Trust, such excess being computed in the manner specified hereunder: -

(a) A security listed on a stock exchange shall be valued at its last sale price on

such exchange on the date as of which it is valued, or if such exchange is not open on such date, then at its last sale price on the next preceding date on which such exchange was open and if no sale is reported for such date, the security

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shall be valued at an amount not higher than the closing asked price nor lower than the closing bid price;

(b) An investment purchased and awaiting payment against delivery shall be

included for valuation purposes as a security held, and the cash account of the Fund shall be adjusted to reflect the purchase price, including brokers commission and other expenses incurred in the purchase thereof but not disbursed as of the valuation date;

(c) An investment sold but not delivered pending receipt of proceeds shall be

valued at the net sale price;

(d) The value of any dividends, bonus shares or rights which may have been declared on securities in the portfolio but not received by the Fund as of the close of business on the valuation date shall be included as assets of the Fund, if the security upon which such dividends, bonuses or rights were declared is included in the assets and is valued ex-dividend, ex-bonus or ex-rights as the case may be;

(e) A security not listed or quoted on a stock exchange shall be valued at

investment price or its break up value as per last audited accounts, whichever is lower;

(f) Mark-up accrued on any mark-up bearing security in the portfolio shall be

included as an asset of the Fund, if such accrued interest is not otherwise included in the valuation of the security;

(g) Any other income accrued up to the date on which computation was made shall

also be included in the assets;

(h) All liabilities, expenses, taxes and other charges, including Annual Fee due or accrued up to the date of computation which are chargeable under the Rules, other than the paid-up capital of the Fund, shall be deducted from the value of the assets; and

(i) The remuneration accrued up to the date of computation payable to the

Investment Adviser, for providing management and other services, shall be included as an expense.

17.26 “Net Asset Value” or "NAV" means per Certificate value of the Fund arrived at

by dividing the Net Assets by the number of Certificates outstanding. 17.27 “Ordinance” means the Securities and Exchange Ordinance, 1969, as amended

from time to time.

17.28 “Par Value” means the face value of a Certificate that shall be Rupees Ten (Rs. 10/-).

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17.29 “Personal Law” means the law of inheritance and succession as applicable to the individual Holder.

17.30 “Pre-IPO Investors” means the initial investors, who shall be required to

subscribe to the Certificates in the pre-IPO.

17.31 “Prospectus/ Offering Document” means the advertisement or other document, which contains the investment and distribution policy and all other information in respect of the Trust, as required by the Rules and is calculated to invite offers by the public to invest in the Trust.

17.32 “Proxy” means written authority given by a Holder to another person to attend

the meeting of the Holders, called by the Investment Adviser, pursuant to this Deed. Proxy shall be issued in the same manner and on the same terms as provided in the Companies Ordinance.

17.33 “Register,” means the Register of the Holders kept pursuant to the Rules and this

Deed.

17.34 “Registrar” means a company including a Bank that the Investment Adviser shall appoint for performing the Registrar Functions.

17.35 “Registrar Functions” means the functions with regard to:

(a) Maintaining the Register;

(b) Receiving application for transfer/ transmission of Certificates directly from

Holder or legal representatives;

(c) Processing requests for transfer and transmission of Certificates with regard to the Holders; and effectuating such transfers in the Register;

(d) Issuing Certificates to Holders;

(e) Dispatching income distribution warrants;

(f) Canceling old Certificates on replacement; and

(g) Keeping record of change of addresses/ other particulars of the Holders.

17.36 “Reporting” or “Base Currency” means Pakistani Rupee in which financial

statements are presented. 17.37 “Resolution” means a resolution which has been passed pursuant to this Deed by

a majority of not less than three-fourth of such Certificate Holders entitled to vote as are present in person or by Proxy at a general meeting of which not less than twenty-one days notice specifying the intention to propose the resolution has been duly given. The voting shall be on the basis of Certificate Holding, as provided in the Companies Ordinance.

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17.38 “Rules” means the Non-Banking Finance Companies (Establishment and

Regulation) Rules 2003, as amended from time to time.

17.39 “SECP” means the Securities and Exchange Commission of Pakistan, established under Section 3 of the Securities and Exchange Commission of Pakistan Act, 1997, and its legal successor.

17.40 “Stock Exchange” means Karachi Stock Exchange, Lahore Stock Exchange,

Islamabad Stock Exchange or any other stock exchange registered under the Ordinance.

17.41 “Transaction Day” means every Business Day on which the Stock Exchange is

open for business.

17.42 “Trust”, “Fund” “Closed-end Scheme” or “Closed-end Trust” means the ABAMCO Composite Fund, a closed-end scheme, constituted by a Trust Deed dated April 6, 2004 by and between ABAMCO Limited as the Investment Adviser and Central Depositary Company of Pakistan Limited as the Trustee, whose Certificates are traded at a Stock Exchange.

Words and expressions used but not defined herein shall have the meanings assigned to them in the Rules. Words importing persons include corporations, words importing the masculine gender include the feminine gender, words importing singular include plural words, “written” or “in writing” include printing, engraving, lithography, or other means of visible reproduction.

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PART XVIII – SIGNATORIES OF THE OFFERING DOCUMENT ABAMCO, as the Investment Adviser, accepts the responsibility for the information contained in this Offering Document as being accurate at the date of publication.

Name Position on the Board of the

Investment Adviser Signatures

Mr. Munawar Alam Siddiqui Chairman

Mr. Mohammad Najam Ali Chief Executive

Mr. Munaf Ibrahim Director

Mr. Abid Hussain Zuberi Director

Mr. Mazharul Haq Siddiqui Director

Shaikh Mukhtar Ahmed Director

Mr. William H. Kleh Director

Dated: May 4, 2004 Place: Karachi, Pakistan Witness: __________________________ Address: _________________________ NIC No.: __________________________

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ANNEXURE “A” LIST OF MATERIAL CONTRACTS

1) Trust Deed Trust Deed signed between ABAMCO Limited as the Investment Adviser and Central Depositary Company of Pakistan Limited as the Trustee, on April 6, 2004 to constitute ABAMCO Composite Fund.

2) Underwriting Agreements

1. Agreement with East West Insurance Company Limited to underwrite 15,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

2. Agreement with Bolan Bank Limited to underwrite 12,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

3. Agreement with Bank AlFalah Limited to underwrite 6,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

4. Agreement with Jahangir Siddiqui & Company Limited to underwrite 6,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

5. Agreement with Jahangir Siddiqui Investment Bank Limited to underwrite 6,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

6. Agreement with EFU General Insurance Limited to underwrite 4,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

7. Agreement with EFU Life Assurance Limited to underwrite 4,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

8. Agreement with Al Zamin Leasing Modaraba to underwrite 3,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

9. Agreement with Crescent Commercial Bank Limited to underwrite 3,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

10. Agreement with Faysal Bank Limited to underwrite 3,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

11. Agreement with National Investment Trust Limited to underwrite 3,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

12. Agreement with PICIC Commercial Bank Limitedto underwrite 3,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

13. Agreement with Saudi Pak Commercial Bank Limited to underwrite 3,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

14. Agreement with First Dawood Investment Bank Limited to underwrite 2,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

15. Agreement with Fidelity Investment Bank Limited to underwrite to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

16. Agreement with Invest Capital & Securities (Pvt.) Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

17. Agreement with Javed Omar Vohra & Company Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

18. Agreement with Pak Oman Investment Company (Pvt.) Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

19. Agreement with Pakistan Industrial Credit & Investment Corporation Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

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20. Agreement with Pakistan Kuwait Investment Company Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

21. Agreement with Prime Commercial Bank Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

22. Agreement with Security Investment Bank Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

23. Agreement with Security Leasing Corporation Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

24. Agreement with Soneri Bank Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

25. Agreement with Union Bank Limited to underwrite 1,500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

26. Agreement with First Standard Investment Bank Limited to underwrite 1,250,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

27. Agreement with Noman Abid & Company Limited to underwrite 1,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

28. Agreement with ORIX Leasing Pakistan Limited to underwrite 1,000,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

29. Agreement with Network Leasing Corporation Limited to underwrite 1,250,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

30. Agreement with Ali Hussain Rajabali Limited to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

31. Agreement with Amin Siddique Parekh Securities (Pvt.) Limited to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

32. Agreement with Aziz Fidahusein & Company (Pvt.) Limited to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

33. Agreement with Crescent Leasing Corporation Limited to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

34. Agreement with First Equity Modaraba to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

35. Agreement with Saudi Pak Leasing Company. Limited to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

36. Agreement with Sigma Leasing Corporation Limited to underwrite 500,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

37. Agreement with Guardian Modaraba to underwrite 250,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

38. Agreement with Moosani Securities (Pvt.) Limited to underwrite 250,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

39. Agreement with Munaf Sattar Securities (Pvt.) Limited to underwrite 250,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.

40. Agreement with Paramount Leasing Limited to underwrite 250,000 certificates at Rs. 10 each for a fee of 0.75% with a take-up fee of 0.75%.