DAWOOD CAPITAL MANAGEMENT LIMITED

TREASURE CHEST - JANUARY 2012

Economic Outlook According to Pakistan Bureau of Statistics, consumer price index (CPI) rose 10.10% in January from a year ago. Inflation was mainly driven by high energy and food costs. On a month-on-month basis, CPI rose 1.54% from December, according to the bureau. Amid hearing of memo-gate scandal in the Supreme Court, which involved both the military and political leadership, the political environment remained vibrant. This month was the first in the fiscal year where tax collection short fell of the target. Pakistan foreign reserves fell depleted to close at $16.80 billion. Current account posted a surplus of USD 160mn.

Stock Market Review: The month started slowly due to political disturbance but the second half of the month remained on the upside as corporate results were announced which were above market expectations. More results to come in the month of Febru-ary with positive earnings expected. The market was up by 4.65% over all and the average volume on daily basis recorded at 74.52 million for January 2012 against 41.55 million in December 2011. The positive news from the regulators energized the market. The decision of the Finance Minister to accept Securities and Exchange Commission of Pakistan (SECP) proposal on revamping Capital Gains Tax (CGT) rallied the market. The most notable points were the freeze of CGT rate and non declaration of income source till June 30th 2014. Selling of shares from foreign investors were also lacking strength during the month.

Fixed Income / Money Market Review: The market remained relatively liquid due to injection of money by State Bank. State bank conducted T-Bills auction and collection 227 billion as heavy partici-pation was witnessed because of expectations that government might ease monetary policy as inflation rate for December was subdued. Currently, the 3M, 6M and 12M papers are trading at the yield of 11.65%, 11.68% and 11.72% re-spectively.

Disclaimer: This publication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any fund. All investments in mutual funds are subject to market risks. The NAV based prices of units and any dividends/returns thereon are dependant on forces and factors affecting the capital markets. These may go up or down based on market conditions. Past performance is not necessarily indicative of future results.

PREMIER SAVINGS PLANS FOR INDIVIDUAL INVESTORS FIND US ON

STOCK MARKETS STATISTICS

PAKISTAN ECONOMIC UPDATES

Tara Uzra Dawood Chief Investment Officer

Syed Kabiruddin M ember

M uhammad Abbas Fund M anager Fixed Income

M uhammad Aslam Assistant Fund M anager Equity

Zeeshan Swalaheen Research Associate

INVESTMENT COMMITTEE

5B Lakson Square Building No. 1, Sarwar

Shaheed Road, Karachi-74200, Pakistan

Tel: (92 21) 35621001-6 Fax: (92 21) 35621010

Email: dcm@edawood.com

URL: www.edawood.com

DAWOOD CAPITAL MANAGEMENT LIMITED

Indices Jan-12 D ec-11 R eturn A vg. Vo l. A vg. Val. Jan-12 D ec-11

KSE- 10 0 11,874.89 11,347.66 4.65% 59.08 3.07 A vg. V o l. 74.52 M 41.55 M

KSE- 3 0 11,172.94 10,179.03 9.76% 36.63 2.81 M kt . C ap . 3.08 T 2.95 T

KM I- 3 0 21,622.44 20,137.71 7.37% 27.53 2.14 FIPI $ (0.45) M $ (24.92) M

A ll- Shares 8,225.97 7,856.82 4.70% 74.52 3.14 6 M KIB OR 11.90% 11.98%

DETAILS OF NON COMPLIANT INVESTMENTS

DIF (DMMF) TOP TEN DEBT SECURITIES FUND MANAGER’S COMMENTS

During the month, Fund generated a return of 12.50% pa as compared to its benchmark of 11.90%. Thus, outper-formed its benchmark by 0.60%. The new year stared with positive outlook for the Fund as few of the debt issu-ers paid its due obligations. We are hopeful that this trend will continue in coming months as well. DIF is still a goldmine for those who want to earn capital gains on in-vestments.

FUND STATISTICS

INVESTMENT OBJECTIVE

To preserve the investor’s capital w hile providing a return

greater than that offered by other investments of similar risk

profile through investments in a portfolio of money market

instruments.

DAWOOD INCOME FUND

TREASURE CHEST - JANUARY 2012

(FORMERLY DAWOOD MONEY MARKET FUND)

PERFORMANCE STATISTICS

Net Assets PKR 484.04 Mn

NAV PKR 77.9875

Wt. Avg. Time To Maturity 0.70 Years

Standard Deviation 0.38%

Sharpe Ratio (0.16)

Information Ratio (0.23)

VAMI 1.07

RETURNS Jan-2012 Dec-2011

DIF (DMMF) 12.50% 3.09%

Benchmark 11.90% 11.98%

Alpha 0.60% -8.89%

1 Month 3 Months 6 Months YTD

12.50% 8.37% 11.27% 12.22%

HISTORIC RETURNS

ASSET MIX Jan-2012 Dec-2011

Placements 5.37% 5.89%

TFC / Sukuk 19.92% 21.85%

T-Bills 72.32% 65.58%

Cash 2.15% 6.00%

Others 0.23% 0.68%

CREDIT QUALITY Jan-2012 Dec-2011

AAA 72.32% 65.58%

A- 4.67% 4.96%

BBB 4.87% 5.27%

< BBB 13.13% 14.22%

Unrated 2.62% 3.28%

Placements, 5.37%

TFC / Sukuk, 19.92%

T-Bills, 72.32%

Cash, 2.15%Others, 0.23%

Jan-2012

0% 7% 14% 21% 28% 35% 42% 49% 56% 63% 70% 77%

AAA

A-

BBB

< BBB

Unrated

72.32%

4.67%

4.87%

13.13%

2.62%

Jan

-2012

INVESTEE COMPANY TYPE %

Invest Capital Investment Bank Limited COI 5.42%

Trust Investment Bank Limited TFC 4.91%

Avari Hotels (Pvt) Limited TFC 4.72%

Invest Capital and Investment Bank Limited TFC 4.65%

Kohat Cement Company Limited SUKUK 2.65%

Pace Pakistan Limited TFC 1.94%

Eden Housing Limited SUKUK 1.12%

Escort Investment Bank Limited TFC 0.11%

TOTAL 25.53%

Name of Fund Dawood Income Fund

(Formerly Dawood Money Market Fund)

Structure Open End

Industry Category Income

Benchmark Avg. 6 Month KIBOR

Trustee & Custodian MCB Financial Services Limited

Auditor Ernst & Young Ford Rhodes

Registrar Gangjees Registrar Services (Pvt.) Ltd.

Legal Advisor Bawaney & Partners

Launch Date 19-May-2003

Listing KSE

Duration Perpetual

Management Fee 1.00% per annum

Sales Load 1% Front End

Pricing Mechanism Forward

Leverage Nil

Risk Profile Medium

AMC Rating AM3-

Stability Rating A- (f)

Name of Investment Type Value Before

Provision

Provision

(if any)

Value After

Provision

% Net

Assets

% Gross

Assets

Trust Investment Bank Limited TFC 24,990,000 1,203,693 23,786,307 4.91% 4.87%

Escort Investment Bank Limited TFC 552,570 - 552,570 0.11% 0.11%

Pace Pakistan Limited TFC 9,403,856 - 9,403,856 1.94% 1.92%

Dewan Cement Limited TFC 150,000,000 150,000,000 - 0.00% 0.00%

Invest Capital and Investment Bank Limited TFC 22,500,000 - 22,500,000 4.65% 4.60%

Invest Capital and Investment Bank Limited TFC 15,569,441 15,569,441 - 0.00% 0.00%

Eden Housing Limited SUKUK 9,898,874 4,454,493 5,444,381 1.12% 1.11%

New Allied Electronics Industries Limited TFC 25,433,190 25,433,190 - 0.00% 0.00%

Kohat Cement Company Limited SUKUK 12,822,754 - 12,822,754 2.65% 2.62%

Invest Capital Investment Bank Limited COM 36,000,000 9,747,718 26,252,282 5.42% 5.37%

Trust Investment Bank Limited COI 8,041,359 8,041,359 - 0.00% 0.00%

DAWOOD ISLAMIC FUND TREASURE CHEST - JANUARY 2012

DETAILS OF NON COMPLIANT INVESTMENTS

DIF (DMMF) TOP TEN SECURITIES FUND MANAGER’S COMMENTS

During the month your fund was up by 1.14% as compared to its benchmark which was up by 2.16%. Thus DIF under-performed by 1.02%. It was mainly due to stocks upward performance during the month and the Fund held only blue chip scripts in the portfolio. DIF is still the best choice of in-vestment to earn riba free Halal Munafa!.

FUND STATISTICS

Name of Fund Dawood Islamic Fund

Structure Open End

Industry Category Islamic Asset Allocation

Benchmark 25% KMI-30 + 75% Savings Rate

Shariah Advisors Prof. Mufti Munib-ur-Rehman

Mufti Syed Sabir Hussain

Mufti Zahid Siraj

Trustee & Custodian CDC Pakistan Limited

Auditor Ernst & Young Ford Rhodes

Registrar Gangjees Registrar Services (Pvt.) Ltd.

Legal Advisor Bawaney & Partners

Launch Date 14-Jul-2007

Listing KSE

Duration Perpetual

Management Fee 1.50% per annum

Sales Load 1.50% Front End

Pricing Mechanism Forward

Risk Profile Medium

AMC Rating AM3-

PERFORMANCE STATISTICS

Net Assets PKR 339.16 Mn

NAV PKR 105.6514

Wt. Avg. Time To Maturity 1.40 Years

Standard Deviation 0.57%

Sharpe Ratio (0.90)

Sortino Ratio (2.61)

Information Ratio 0.08

VAMI 1.04

Returns Jan-2012 Dec-2011

DIF-S 1.14% 0.11%

Benchmark 2.16% -0.90%

Alpha -1.02% 1.01%

1 Month 3 Months 6 Months YTD

1.14% 1.55% 3.56% 3.83%

HISTORICAL RETURNS

ASSET MIX Jan-2012 Dec-2011

Musharika 7.58% 7.85%

Sukuk 24.09% 24.89%

GoP Ijara 29.30% 29.73%

Cash & Eq. 23.35% 20.59%

Equities 10.99% 11.76%

Others 4.69% 5.18%

CREDIT QUALITY Jan-2012 Dec-2011

AAA 29.30% 29.73%

AA 7.33% 7.44%

A 4.59% 4.62%

< A- 16.83% 17.24%

Unrated 2.92% 3.46%

Musharika, 7.58%

Sukuk, 24.09%

GoP Ijara, 29.30%

Cash & Eq., 23.35%

Equities, 10.99%

Others, 4.69%

Jan-2012

0% 3% 6% 9% 12% 15% 18% 21% 24% 27% 30%

AAA

AA

A

< A-

Unrated

29.30%

7.33%

4.59%

16.83%

2.92%

Jan

-2012

EQUITY ALLOCATION Jan-2012 Dec-2011

Oil & Gas 7.17% 7.13%

Pharma & Bio Tech 1.93% 1.97%

Personal Goods 0.86% 0.77%

Electricity 0.76% 0.75%Chemicals 0.27% 0.07%Cement 0.00% 1.07%

Oil & Gas, 7.17%

Pharma & Bio Tech,

1.93%

Personal Goods, 0.86%

Electricity, 0.76%

Chemicals, 0.27%

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Investee Company Type %

Gop Ijarah SUKUK 29.91%

Maple Leaf Cement Factory Limited SUKUK 9.06%

Invest Capital Investment Bank Limited COM 7.74%

Engro Fertilizer Limited SUKUK 7.48%

Pak Elektron Limited SUKUK 4.69%

Kohat Cement Company Limited SUKUK 2.98%

Maple Leaf Cement Factory Limited SUKUK 0.38%

TOTAL 62.25%

Name of Investment Type Value Before

Provision

Provision

(if any)

Value After

Provision

% of Net

Assets

% Gross

Assets

Pak Elektron Limited SUKUK 17,280,106 1,373,267 15,906,839 4.69% 4.59%

M aple Leaf Cement Factory Limited SUKUK 48,104,993 17,380,171 30,724,822 9.06% 8.87%

M aple Leaf Cement Factory Limited SUKUK 1,840,000 544,531 1,295,469 0.38% 0.37%

New Allied Electronics Industries Limited SUKUK 5,027,500 5,027,500 - 0.00% 0.00%

Kohat Cement Company Limited SUKUK 10,120,565 - 10,120,565 2.98% 2.92%

Invest Capital Investment Bank Limited COM 36,000,000 9,747,716 26,252,284 7.74% 7.58%

TOTAL 118,373,164 34,073,185 84,299,978 24.86% 24.35%

FIRST DAWOOD MUTUAL FUND

TREASURE CHEST - JANUARY 2012

DETAILS OF NON COMPLIANT INVESTMENTS

FDMF TOP TEN DEBT SECURITIES FUND MANAGER’S COMMENTS

During the month, FDMF was up by 0.23% as compared to its benchmark which was up by 2.82%. Thus FDMF was underperformed by 2.59%. It was mainly due to the provi-sion in the debt security due to non payment as per Regu-lation. We are hopeful that these will recover in the long run.

FUND STATISTICS Name of Fund First Dawood Mutual Fund

Structure Closed End

Industry Category Balanced

Benchmark 50% KSE-100 + 50% Avg. 6 M KIBOR

Trustee & Custodian CDC Pakistan Limited

Auditor Ernst & Young Ford Rhodes

Registrar FD Registrar Services Pvt. Limited

Legal Advisor Bawaney & Partners

Launch Date 23-Mar-2005

Listing KSE

Management Fee 2.00% per annum

Pricing Mechanism Forward

Risk Profile Medium - High

AMC Rating AM3-

INVESTMENT OBJECTIVE

To preserve the investor’s capital w hile providing a return

greater than that offered by other investments of similar risk

profile through investments in a mixed portfolio of money market,

f ixed income and stocks.

Equities, 34.20%

TFC / Sukuk, 18.12%

T-Bills, 42.17%

Cash & Eq., 3.86%

Others, 1.65%

Jan-2012

0% 7% 14% 21% 28% 35% 42% 49%

AAA

A-

BBB

<BBB

Unrated

42.17%

0.41%

1.76%

13.94%

2.00%

Jan

-201

2

ASSET MIX Jan-2012 Dec-2011

Equities 34.20% 36.89%

TFC / Sukuk 18.12% 20.67%

T-Bills 42.17% 38.55%

Cash & Eq. 3.86% 2.81%

Others 1.65% 1.08%

CREDIT QUALITY Jan-2012 Dec-2011

AAA 42.17% 38.55%

A- 0.41% 0.40%

BBB 1.76% 2.35%

<BBB 13.94% 15.60%

Unrated 2.00% 2.31%

EQUITY ALLOCATION Jan-2012 Dec-2011

Life Insurance 12.60% 12.38%

Oil & Gas 7.06% 6.94%

Pharma & Bio Tech 5.59% 5.60%

Non-Life Insurance 2.74% 2.60%

Chemicals 1.75% 2.09%

Fixed Line Telecom 0.88% 0.82%

Banks 0.81% 1.97%

Beverages 0.60% 0.56%

Equity Invest. Instruments 0.59% 0.57%

Personal Goods 0.59% 1.49%

Electricity 0.52% 0.50%

Financial Services 0.26% 0.22%

Food Producers 0.21% 0.43%

Construction & Materials 0.00% 0.72%

Life Insurance, 12.60%

Oil & Gas, 7.06%

Pharma & Bio Tech, 5.59%

Non-Life Insurance, 2.74%

Chemicals , 1.75%

Fixed Line Telecom, 0.88%

Banks, 0.81%

Beverages, 0.60%

Equity Invest. Instruments , 0.59%

Personal Goods, 0.59%

Electricity, 0.52%

Financial Services, 0.26%

Food Producers, 0.21%

Construction & Materials , 0.00%

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Investee Company Type %

Maple Leaf Cement Factory Limited SUKUK 7.56%

B.R.R. Guardian Modaraba SUKUK 3.67%

Kohat Cement Company Limited SUKUK 2.02%

Trust Investment Bank Limited TFC 1.78%

Pace Pakistan Limited TFC 1.34%

Telecard Limited TFC 0.95%

Avari Hotels (Pvt) Limited TFC 0.41%

Maple Leaf Cement Factory Limited SUKUK 0.32%

Escort Investment Bank Limited TFC 0.22%

Total 18.28%

PERFORMANCE STATISTICS Net Assets PKR 501.35 M

NAV PKR 8.63

Wt. Avg. Time To Maturity 0.79 Years

Standard Deviation 2.57%

Sharpe Ratio (0.71)

Sortino Ratio (0.86)

Information Ratio (0.84)

VAMI 0.94

RETURNS Jan-2012 Dec-2011

FDMF 0.23% -2.38%

Benchmark 2.82% -0.30%

Alpha -2.59% -2.08%

1 Month 3 Months 6 Months YTD

0.23% -1.43% -4.78% -5.39%

HISTORICAL RETURNS

Name of Investment Type Value Before

Provision

Provision

(if any)

Value After

Provision

% Net Assets % Gross

Assets

Escort Investment Bank Limited TFC 1,105,140 - 1,105,140 0.22% 0.22%

Telecard Limited TFC 6,826,313 2,047,894 4,778,419 0.95% 0.94%

Trust Investment Bank Limited TFC 9,371,250 451,385 8,919,865 1.78% 1.76%

M aple Leaf Cement Factory Limited SUKUK 54,398,180 16,489,106 37,909,074 7.56% 7.50%

M aple Leaf Cement Factory Limited SUKUK 2,270,000 671,786 1,598,214 0.32% 0.32%

Pace Pakistan Limited TFC 9,988,000 3,270,960 6,717,040 1.34% 1.33%

B.R.R. Guardian M odaraba SUKUK 18,398,438 - 18,398,438 3.67% 3.64%

Amtex Limited SUKUK 22,500,000 22,500,000 - 0.00% 0.00%

Invest Capital and Investment Bank Limited TFC 19,461,809 19,461,809 - 0.00% 0.00%

New Allied Electronics Industries Limited TFC 7,222,749 7,222,749 - 0.00% 0.00%

Kohat Cement Company Limited SUKUK 10,120,564 - 10,120,564 2.02% 2.00%

TOTAL 161,662,442 72,115,689 89,546,753 17.86% 17.71%