| Tri-Star Mutual Fund Limited |
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| ANNUAL
REPORT 1997 |
|
|
| Company
Information |
|
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| Board
of Directors: |
Mr. Mohamed Ahmad Ismail |
|
Chairman |
|
|
|
Mr. Habib Jamal |
|
Director |
|
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|
Mr. Rashid Ahmad |
|
Director |
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|
Mr. Jawed Ahmad Siddiqui |
|
Director |
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|
Mr. Asad Ahmad |
|
Director |
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|
Mr. Jawed Dost Mohammad |
|
Director |
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|
Mr. Tahir Ahmad |
|
Chief Executive |
|
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| Investment
Adviser: |
Tri-Star Investments
(Pvt) Ltd |
|
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|
F/498, S.I.T.E., |
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|
Karachi. |
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|
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| Auditors: |
|
Hyder Bhimji & Co. |
|
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|
Chartered Accountants |
|
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|
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| Bankers: |
|
Bank AI-Habib Ltd. |
|
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|
Citibank N.A. |
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|
Habib Bank Ltd. |
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|
| Registrar
& Certificate |
F/498, S.I.T.E., |
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| Transfer
Office: |
Karachi-75700. |
|
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| Registered
Office: |
F/498, S.I.T.E., |
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|
Karachi-75700. |
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| Notice
of Meeting |
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| Notice
is hereby given that the Fifth Annual General Meeting of Tri-Star Mutual Fund
Ltd |
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| will
be held on Wednesday, 31st December, 1997 at F/498 S.I.T.E. Karachi at 9.30
am to transact |
|
| the
following business: |
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|
|
|
|
| 1.
recitation from the Holy Quran. |
|
| 2.
To receive, consider and adopt the annual audited accounts for the year ended
30th June, |
|
| 1997
together with the Directors' Report and Auditors Report thereon. |
|
| 3.
To appoint Auditors of the Company and to fix their remuneration. the present
Auditors |
|
| M/s
Hyder Bhimji & Co. Chartered Accountants retire and being eligible, offer
themselves for |
|
| reappointment. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
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| By
an on behalf of the board. |
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| Company
Secretary. |
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|
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| Dated:
10th December, 1997 |
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| Place:
Karachi |
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| Notes: |
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| 1.
The Shares transfer books of the company will remain Closed form 23rd
December, 1997 |
|
| to
31st December, 1997 (both days inclusive). |
|
| 2.
A member entitled to attend the Annual General meeting is entitled to appoint
a proxy |
|
| and
vote in his place at the meeting. Proxies in order to be effective must be
received at the |
|
| registered
office of the Fund at F/498, SITE, Karachi duly stamped, Singed and witnessed
not |
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| later
than 48 hours before the meeting. |
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| 3.
Members are requested to notify any change in their address immediately. |
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| Directors'
Report |
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| The
Board of Directors have pleasure in presenting the fifth Annual Report
together with the audited |
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| accounts
for the year ended June 30, 1997. |
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|
|
| FINANCIAL
RESULTS: |
|
|
| During
the period under review, your Fund earned Rs 389,973 as Dividend Income and
profit on Deposits. However, Rs (1,431,645) capital loss occurred in
investments as the market conditions |
| remained
depressed during the current year as well. The Fund followed the policy of
staying at the |
|
| side
line during second half of the year. The Karachi Stock Exchange 100 index
stood at 1565 points |
|
| on
June 30, 1997, as compared to 1703 points on June 30, 1996 i.e. a fall of 140
point for June 30, |
|
| 1996
to June 30, 1997. After meeting administrative and other expenses in the net
loss before taxation |
|
| came
to Rs 2.159 million. |
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| The
financial results are summarized as follows: |
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|
1997 |
1996 |
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|
|
|
(Rupees) |
(Rupees) |
|
|
|
|
| Income |
|
|
|
389,973 |
627,019 |
|
| Capital
Gain/Loss |
|
|
(1,431,645) |
(2,362,979) |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
(1,041,672) |
(1,735,960) |
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| Less:
Operating Expenses |
|
1,117,936 |
1,234,480 |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
(2,159,608) |
(2,970,440) |
|
| Adjustment
relating to prior year |
|
45,063 |
3,958 |
|
|
|
|
--------- |
--------- |
|
| Provision
for taxation: |
|
|
(2,114,545) |
(2,966,482) |
|
| for current year |
|
|
|
-- |
-- |
|
| for
prior year |
|
|
10,824 |
-- |
|
|
|
|
--------- |
--------- |
|
| (Loss)
for the year |
|
|
(2,103,721) |
(2,969,617) |
|
|
|
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|
========== |
========== |
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| The
Board of Directors have not recommended
any dividend for the year. |
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|
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| BUSINESS: |
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|
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| In
September, 1996 the Income tax Authorities raided the Fund's Premise and took
away by force all |
|
| records,
documents and Valuable Securities including FEBC's/bearer NIT units of all
our Group |
|
| Companies
which included FEBC's of the Fund, without any lawful authority and without
making any |
|
| inventory.
This raid caused a serious disruption in Fund's business. The Fund filed a
suit against |
|
| the
Income Tax authorities in the Honorable Court of Sindh challenging the said
act as illegal |
|
| and
orders have been passed by the record and documents have been returned to the
Fund under the orders |
|
| of
the Honorable High Court of Sindh in March/April 1997 but FEBC's/bearer NIT
units and other valuable |
|
| have
not yet been returned by the Income Tax Department. The matter is now
subjudice. |
|
|
|
|
|
| MARKET
REVIEW AND FUTURE OUTLOOK. |
|
|
| Bearish
sentiments prevailed in the first half due to turmoil at political front and
weakness of the economy. |
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| Periodic
devaluation of the rupee in the first half and mini budget in October, 1996
shattered the confidence |
|
| of
the investor and the market kept on losing ground due to negative indicators. |
|
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| Market
went down by 27% on December 31,1996 as compared to June 30, 1996. Market
improved slightly |
|
| in
second half of the year due to political stability and economic reforms
announced by the present govern- |
|
| ment.
Only occasional genuine buying was witnessed and the market went through
prolonged dullness. |
|
| Investors
maintained a wait and see policy due to precarious condition of the market.
KSE-100 index stood |
|
| at
1565 points on June 30, 1997 as compared to 1703 points on June 30, 1996,
i.e. 8% less then the last |
|
| year. |
|
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| We
hope that the present strong government with firm determination will improve
economic health of the |
|
| country
and the stock market will surge forward. Investment will improve the overall
market as the strong |
|
| foundation
has already been laid. As the economy will improve and stock market will
revive, we hope better |
|
| results
would be achieved. |
|
|
| AUDITORS |
|
|
| The
present auditors M/s. Hyder Bhimji & Co., are due for retirement and
being eligible offer themselves for |
|
| re-appointment. |
|
|
| ACKNOWLEDGMENTS |
|
|
| Your
directors would like to record their appreciation of the dedication and hard
work of the staff and officers |
|
| of
the Fund. |
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|
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| Auditors'
Report to the Certificate Holders |
|
|
|
| We
have examined the annexed balance sheet of Tri-Star Mutual Fund LTD., as at
June 30,1997 and the |
|
| related
Profit and Loss Account and the Statement of Changes in Financial Position
(Cash Flow Statement) |
|
| together
with the Notes to the accounts for the year then ended. Our examination was
made in accordance |
|
| with
the generally, accepted auditing procedures as were considered necessary in
the circumstances and |
|
| we
state that we have obtained all the information and explanations which to the
best of our knowledge and |
|
| belief
were necessary for the purpose of audit and we report that: |
|
|
| a)
In our opinion proper books of accounts have been kept by the Company as
required by the Compa- |
|
| nies
Ordinance, 1984 and Rule 16 of the Investment Companies and Investment
Adviser's Rules |
|
| 1971. |
|
|
|
|
|
| b)
in our opinion: |
|
|
|
| i.
The Balance Sheet and the Profit & Loss Account together with the Notes
thereon have been |
|
| draw
up in conformity with the Companies Ordinance, 1984 and in accordance with
the provi- |
|
| sions
of the Investment Companies and Investment Adviser's Rules, 1971, and are in
agree- |
|
| ment
with the books of account and are further in accordance with accounting
policies consis- |
|
| tently
applied. |
|
|
|
| ii.
the expenditure incurred was for the purpose of the Company's business: |
|
|
| iii.
the business conducted. investments made and expenditure incurred during the
year were in |
|
| accordance
with Investment Policy of the company and Investment Companies and Invest- |
|
| ment
Adviser's Rules, 1971. |
|
|
| iv.
The company has not contravened the provisions of Rule 8 of the Investment
Companies and |
|
| Investment
Adviser's Rules, 1971: and |
|
|
| c)
In our opinion and to the best of our information and according to the
explanation given to us, the |
|
| Balance
Sheet and the Profit & Loss Account and the Cash Flow Statement together
with the notes |
|
| forming
part thereof give the information required by the Companies Ordinance. 1984
and Invest- |
|
| ment
Companies and Investment Adviser's Rules, 1971 in the manners so required and
respectively |
|
| give
a true and fair view of the state of the Company's affairs as at June 30,1997
and of the loss and |
|
| changes
in financial position for the year ended on that date: |
|
|
| d)
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance 1980. |
|
|
| Balance
Sheet As at June 30, 1997 |
|
|
|
Note |
1997 |
1996 |
|
|
|
(Rupees) |
(Rupees) |
|
|
|
|
| CAPITAL
& RESERVES |
|
|
|
|
|
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| AUTHORISED
CAPITAL |
|
|
|
| 20,000,000
Certificates of Rs. 10/-each |
|
|
200,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| ISSUED,
SUBSCRIBED AND PAID-UP-CAPITAL |
|
|
|
| 5,000,
000 certificates of Rs. 10/-each |
|
|
50,000,000 |
50,000,000 |
|
| fully
paid issued of cash |
|
|
|
| Accumulated
Loss |
|
|
(7,454,672) |
(5,350,951) |
|
|
|
|
---------- |
---------- |
|
|
|
|
42,545,328 |
44,649,049 |
|
| DEFERRED
EXPENDITURE PAYABLE |
|
3 |
554,664 |
1,109,324 |
|
| CURRENT
LIABILITIES |
|
|
---------- |
---------- |
|
| Current
maturity of deferred Expenditure |
|
3.1 |
554,660 |
554,660 |
|
| Due
to investment adviser-An associated company |
|
4 |
1,018,635 |
603,547 |
|
| Trade
creditors, accrued expenses and other liabilities |
5 |
116,567 |
87,317 |
|
| Provision
for taxation |
|
|
3,135 |
23,135 |
|
|
|
|
---------- |
---------- |
|
|
|
1,692,997 |
1,268,659 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
44,792,989 |
47,027,032 |
|
|
|
|
========== |
========== |
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
|
| DEFERRED
EXPENDITURE |
|
6 |
554,664 |
1,109,324 |
|
|
|
|
| INVESTMENTS
- Marketable Securities |
|
7 |
44,094,858 |
45,893,578 |
|
|
|
|
| CURRENT
ASSETS |
|
|
---------- |
---------- |
|
| Advances,
Pre-payments & other receivables |
|
8 |
109,921 |
327 |
|
| Cash
& bank balances |
|
9 |
33,546 |
23,803 |
|
|
|
|
---------- |
---------- |
|
|
|
|
143,467 |
24,130 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
44,792,989 |
47,027,032 |
|
|
|
|
========== |
========== |
|
|
| Profit
and Loss Account |
|
| For
the year ended June 30, 1997 |
|
|
|
Note |
1997 |
1996 |
|
|
|
|
(Rupees) |
(Rupees) |
|
|
|
|
| INCOME |
|
10 |
389,973 |
627,019 |
|
| CAPITAL
(LOSS) |
|
11 |
(1,431,645) |
(2,362,979) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(1,041,672) |
(1,735,960) |
|
| Less:
OPERATING EXPENSES |
|
|
|
|
|
|
|
| Administrative |
|
12 |
626,348 |
628,270 |
|
| Financial |
|
13 |
131,958 |
204,874 |
|
| Remuneration
of investment Adviser |
|
4.1 |
359,630 |
401,336 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,117,936 |
1,234,480 |
|
|
|
|
---------- |
---------- |
|
| (Loss)
before taxation |
|
|
(2,159,608) |
(2,970,440) |
|
| Adjustment
relating to prior years |
|
|
45,063 |
3,958 |
|
|
|
|
---------- |
---------- |
|
| (Loss)
before taxation |
|
(2,114,545) |
(2,966,482) |
|
|
|
---------- |
---------- |
|
| Provision for taxation: |
|
|
- |
(3,135) |
|
| For
current year |
|
|
|
10,824 |
- |
|
|
|
|
---------- |
---------- |
|
| For
Prior Year - written back |
|
10,824 |
(3,135) |
|
|
|
|
---------- |
---------- |
|
| (Loss)
after taxation |
|
(2,103 721) |
(2,969,617) |
|
| Accumulated
(Loss) brought forward |
|
(5,350,951) |
(2,381,334) |
|
|
|
---------- |
---------- |
|
| Accumulated
(Loss) Carried forward |
|
(7,454,672) |
(5,350,951) |
|
|
|
|
========== |
========== |
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| Cash
Flow Statement |
|
| For
the year ended June 30, 1997 |
|
|
|
|
1997 |
1996 |
|
|
|
(Rupees) |
(Rupees) |
|
| Cash
Flow From Operating Activities |
|
|
|
|
|
|
| Profit
/ (Loss) before taxation |
|
(2,159,608) |
(2,970,440) |
|
| Add:
Item not involving movement of fund: |
|
|
|
|
|
| Amortization
of deferred expenditure |
|
554,660 |
554,660 |
|
| Financial
Expenses |
|
131,958 |
204,874 |
|
| Loss
on sale of investment |
|
1,431,645 |
2,362,979 |
|
|
|
---------- |
---------- |
|
|
|
(41,345) |
152,073 |
|
|
|
|
| Less: |
Financial Expenses paid |
|
(203,711) |
(254,347) |
|
|
Taxes Paid |
|
(74,034) |
- |
|
|
|
---------- |
---------- |
|
|
|
(319,090) |
(102,274) |
|
|
|
|
|
| Increase/Decrease
in current assets |
|
327 |
607,908 |
|
| Increase/(Decrease)
is current liabilities |
|
516,091 |
(104,582) |
|
|
|
---------- |
---------- |
|
|
|
197,328 |
401,052 |
|
|
|
========== |
========== |
|
| Investing
Activities |
|
|
|
|
|
|
| Purchase
of Investments |
|
|
|
(4,790,750) |
(9,547,960) |
|
| Sale
Proceed of Investments |
|
|
5,157,825 |
9,698,288 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
367,075 |
150,328 |
|
|
|
|
|
========== |
========== |
|
| Financing
Activities |
|
|
|
|
|
| Deferred
Expenditure payable |
|
|
(554,660) |
(554,660) |
|
|
|
|
|
---------- |
---------- |
|
| Net
Cash Flow |
|
|
|
9,743 |
(3,280) |
|
| Cash
and Bank Balance at beginning of the Year |
|
23,803 |
27,083 |
|
|
|
|
|
---------- |
---------- |
|
| Cash
and Bank Balance at the end of the Year |
|
33,546 |
23,803 |
|
|
|
========== |
========== |
|
|
|
| Notes
to the Accounts |
|
| For
the year ended June 30, 1997 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| The
Fund was incorporated as public limited Company under Companies and
Investment Adviser |
|
| s
Rules, 1971. The Fund has entered into an agreement with an associated
company, Tri-Star |
|
| Investments
(Pvt) Ltd., to act as its "Investment Adviser" The Fund is listed
on Karachi and |
|
| Islamabad
Stock Exchanges. |
|
|
| 2.
ACCOUNTING POLICIES |
|
| The
significant accounting policies are summarized below: |
|
|
|
|
| 2.1
The accounts of the Company are prepared under the historical cost
convention. |
|
| 2.2
Investments-Marketable Securities |
|
|
| (i)
Investments are valued at cost. |
|
| (ii)
Profit or loss on sale of Investment is accounted for in the year in which it
arise. |
|
| (iii)
Full provision is made against permanent diminution in the value of
investment |
|
| i.e.
for a period not less than 5 years. |
|
|
| 2.3
Revenue Recognition |
|
|
| (i)
Dividend Income is recorded at the time of the closure of share transfer
books of the |
|
| company
declaring the dividend and is shown net of zakat Deducted. |
|
|
| (ii)
Sales and purchases of securities are recognised on the date of contract.
Capital |
|
| gain
on sale of investment is taken to income of the period on which it arises. |
|
|
| 2.4
Deferred Expenditure |
|
|
|
|
| The
expenditure incurred on the incorporation and on the issue of shares to
public, of the |
|
| investment
company, has been deferred and is being amortized over a period of five |
|
| years. |
|
|
|
|
|
1997 |
1996 |
|
|
|
(Rupees) |
(Rupees) |
|
| 3.
DEFERRED EXPENDITURE PAYABLE |
|
|
|
|
|
|
|
| Balance
on 1st July |
|
|
|
1,663,984 |
2,218,644 |
|
|
|
|
|
|
---------- |
---------- |
|
| Less:
Paid during the year |
|
|
554,660 |
554,660 |
|
| Transferred
to current maturity |
|
3.1 |
554,660 |
554,660 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,109,320 |
1,109,320 |
|
|
|
|
---------- |
---------- |
|
|
|
|
554,664 |
1,109,324 |
|
|
|
|
========== |
========== |
|
|
| The
deferred expenditure is re-imbursable to the Investment Adviser over a period
of 5 years |
|
| with
interest @ 10% per annum. |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
(Rupees) |
(Rupees) |
|
|
|
|
|
|
| 4.
Due to Investment Adviser |
|
|
|
| Tri-Star
Investments (Pvt.) Ltd. |
|
|
|
| An
Associated Company |
|
|
|
|
|
|
|
|
| 2.
Percent of net assets |
|
359,630 |
401,336 |
|
| Add:
Interest on deferred expenditure |
|
130,458 |
202,211 |
|
| Add:
Balance of Previous Year |
|
528,547 |
|
|
|
---------- |
---------- |
|
|
|
1,018,635 |
603,547 |
|
|
|
========== |
========== |
|
|
|
|
|
| 4.1
The Remuneration of the investment adviser at 2 percent of net assets of the
company |
|
| as
at the end of its year of accounts in term of clause 11 (a) of the investment
Company |
|
| and
Investment Adviser's Rules, 1971 has been determined as follows: |
|
|
|
|
| ASSETS |
|
|
|
| Deferred
Expenditures |
|
|
|
554,664 |
1,109,324 |
|
| Marketable
Securities at market Value |
|
19,531,037 |
21,311,324 |
|
| Advances,
Pre-Payments and other Receivables |
|
109,921 |
327 |
|
| Cash
& Bank Balances |
|
|
|
33,546 |
23,803 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
20,229,168 |
22,444,778 |
|
| LIABILITIES |
|
|
========== |
========== |
|
| Deferred
Expenditure payable |
|
|
1,109,324 |
1,663,984 |
|
| Due
to investment Adviser-An associated company |
|
1,018,635 |
603,547 |
|
| Trade
Creditors, accrued expenses and other liabilities |
116,567 |
87,317 |
|
| Provision
for taxation. |
|
|
|
3,135 |
23,135 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
2,247,661 |
2,377,983 |
|
|
|
|
|
---------- |
---------- |
|
| Net Assets |
|
|
|
17,981,507 |
20,066,795 |
|
|
|
|
|
========== |
========== |
|
| 2
Percent of net Assets |
|
|
|
359,630 |
401,336 |
|
|
|
========== |
========== |
|
|
|
Note |
1997 |
1996 |
|
|
|
(Rupees) |
(Rupees) |
|
|
|
|
| 5.
Trade Creditors, Accrued Expenses and |
|
| Other
Liabilities |
|
|
|
|
|
|
| Audit Fee |
|
|
7,500 |
8,250 |
|
| Custodian
Fee |
|
|
104,067 |
74,067 |
|
| Others |
|
|
5,000 |
5,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
116,567 |
87,317 |
|
|
|
|
|
========== |
========== |
|
| 6.
Deferred Expenditure |
|
|
|
|
|
|
|
|
| Balance
as on 1st July 1996 |
|
1,109,324 |
1,663,984 |
|
| Less:
Amortized during the year |
|
554,660 |
554,660 |
|
|
|
---------- |
---------- |
|
|
|
554,664 |
1,109,324 |
|
|
|
|
========== |
========== |
|
|
|
| 7.
INVESTMENTS - Marketable Securities |
|
| These
securities are shares/certificates of Rs10/= each. |
|
|
|
|
| Name
of Company |
|
|
Numbers of Shares |
|
Balance as at June 30, 1997 |
Percentage in Relation to |
|
|
|
Balance As |
Purchases |
Bonus |
Sales |
Number |
At Cost |
At Market |
Own |
Investee |
Companies |
|
|
At July 1 |
|
Shares |
|
of |
(Rupees) |
(Rupees) |
Assets |
Paid-up |
Number of |
|
|
|
|
1996 |
|
Shares |
|
7.1 |
|
Capital |
Shares |
|
| FINANCIAL
COMPANIES |
|
|
|
7.2 |
|
|
| MUTUAL
FUNDS AND BANKS ETC: |
|
|
| Askari
Bank Ltd. |
|
18,985 |
- |
2,637 |
1,500 |
20,122 |
655,714 |
573,477 |
1.46 |
0.07 |
0.02 |
|
