| Al Meezan Mutual Fund Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Financial
Highlights |
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| Directors'
Report |
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| Auditors' Report to the Members |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Statement
of Changes in Equity |
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| Cash Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Statement
of Income & Expenditure in Relation to the Investment Company |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Mr.
Irfan Siddiqui |
Chairman |
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| Mr.
Mohammad Shoaib |
Chief Executive |
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| Mr.
Istaqbal Mehdi |
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| Mr.
Arif-ul-Islam |
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| Dr.
Amjad Waheed |
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| Mr.
Shafiq A. Khan |
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| Ms.
Hina Akhlaq |
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| Mr.
Mazhar Sharif |
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| COMPANY
SECRETARY |
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| Mr.
Farhan Talib |
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| INVESTMENT
ADVISOR |
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| Al
Meezan Investment & Financial Services (Pvt.) Limited |
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| AUDITORS |
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| A.
F. Ferguson & Co. |
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| Chartered
Accountants |
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| CUSTODIAN |
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| Muslim
Commercial Bank Limited |
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| BANKERS |
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| Bank
AL Habib Limited |
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| Faysal
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| National
Bank of Pakistan |
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| REGISTERED
OFFICE & SHARES DEPARTMENT |
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| 4th
Floor, Block "C", Finance & Trade Centre, |
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| Shahrah-e-Faisal,
Karachi 74400, Pakistan |
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| Phone
Number: 566 0735 / 36 |
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| Fax
Number: 567 6143 |
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| E-mail:
meezan@cyber.net.pk |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 5th Annual General Meeting of AI Meezan Mutual Fund
Limited will be held |
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| on
Monday November 20, 2000 at 9:00 a.m. at 4th Floor, Block "C",
Finance & Trade Centre, Shahrah-e- |
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| Faisal,
Karachi to transact the following business: |
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| ORDINARY
BUSINESS: |
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| 1.
To confirm the minutes of the 4th Annual General Meeting held on December 29,
1999. |
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| 2.
To receive, consider, and adopt Audited Accounts of the Company together with
the Directors' |
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| and
Auditors' Report thereon for the year ended June 30, 2000. |
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| 3.
To approve Final Cash Dividend of 21% for the year ended June 30, 2000. |
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| 4.
To appoint Auditors of the Company and fix their remuneration for the year
ending June 30, |
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| 2001.
The present Auditors M/s. A.F. Ferguson & Co., Chartered Accountants,
retire and being |
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| eligible,
offer themselves for re-appointment. |
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| 5.
Any other business with the permission of the Chair. |
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By order of the Board, |
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| Karachi |
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|
FARHAN TALIB |
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| October
23, 2000 |
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Company Secretary |
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| Notes: |
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| 1.
The Share Transfer Books of the Company will remain closed from November 13,
2000 to November |
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| 20,
2000 (both days inclusive). |
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| 2.
No person shall be appointed a proxy who is not a member of the Company and
qualified to vote, save |
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| that
a Corporation or a Company being a member of the Company may appoint as proxy
or as its |
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| representative
under Section 162 of the Ordinance any person though not a member of the
Company, and |
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| the
person so appointed shall be entitled to exercise the same powers on behalf
of the Corporation which |
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| he
represents, as that Corporation could exercise if it was an individual member
of the Company. Any |
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| such
appointment shall be authorized by a resolution of Directors of that Company
or Corporation. |
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|
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| 3.
Every proxy shall be appointed in writing under the hand of the appointer or
by an agent duly authorized |
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| under
a Power of Attorney or if such appointer is a Company or Corporation under
the common seal of |
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| the
Company or Corporation or the hand of its Attorney who may be appointer. |
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| 4.
Shareholders whose shares are deposited with Central Depository System (CDS)
are requested to bring |
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| their
National Identity Card (NIC) along with their Account Number in Central
Depository System for |
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| verification. |
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| 5.
Shareholders are required to promptly notify the Company of any change in the
mailing address. |
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| FINANCIAL
HIGHLIGHTS |
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| Year ended |
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2000 |
1999 |
1998 |
1997 |
July 13, 1995 to |
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June 30, 1996 |
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|
(Rupees in thousands from 1 to 5) |
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|
| 1.
Investment Income |
64,205 |
(9,389) |
28,427 |
32,322 |
10,663 |
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| 2.
Operating Expenses |
8,360 |
5,632 |
4,953 |
6,851 |
5,130 |
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| 3.
Reversal/(provision) for |
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|
|
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| diminution
in the value of |
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|
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| marketable
securities |
33,228 |
57,730 |
(90,518) |
4,766 |
(5,207) |
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| 4. Profit / (loss) |
|
89,072 |
42,709 |
(67,043) |
30,237 |
326 |
|
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| 5. Dividend |
|
52,500 |
16,000 |
-- |
29,500 |
-- |
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| 6.
Rate of dividend (%) |
21.00 |
6.40 |
-- |
11.80 |
-- |
|
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| 7.
Net Asset Value (Rs.) |
10.55 |
8.22 |
7.24 |
10.00 |
9.95 |
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| 8.
Appreciation/(depreciation) in |
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|
| NAV (%) |
|
28.35 |
13.54 |
(27.60) |
0.50 |
-- |
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| 9. Total return (%) |
54.01 |
22.38 |
(27.60) |
12.36 |
-- |
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| 10.
KSE 100 Index |
1520.74 |
1054.67 |
879.62 |
1565.73 |
1703.28 |
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| 11.
Appreciation / (depreciation) in |
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| KSE
100 Index (%) |
44.19 |
19.90 |
(43.82) |
(8.08) |
-- |
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| 12.
Out performance / (under- |
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| performance)
in comparison |
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| to
KSE 100 Index (%) |
9.82 |
2.48 |
16.22 |
20.44 |
-- |
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| DIRECTORS'
REPORT |
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| On
behalf of the Board of Directors, we present the Fifth Annual Report together
with the audited accounts |
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| for
the year ended June 30, 2000. |
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| Operations
Review |
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| The
financial year ended June 30, 2000 turned out to be a better year for the
stock market in general as the |
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| market
continued its improving trend which started last year. After remaining stable
between 1100-1200 |
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| points
levels from July to October 1999, the KSE-100 index started its rise in
November and continued its up |
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| trend
till March 2000 when it peaked off at the level of 2054. Although tile policy
steps taken by the |
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| government
for implementation of its economic and structural reforms program contributed
significantly |
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| towards
improved performance of the market, the increase in speculative activity in
the market also played |
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| its
role in pushing the index to its peak level. Hence the rally could not be
sustained beyond March 2000 and |
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| the
index tumbled by approximately 32% to 1400 level in the last quarter of the
financial year before closing |
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| the year at 1521. |
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| The
declining interest rates and improving domestic liquidity improved the inflow
of funds in the equities. |
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| The
KSE 100 index, which was 1054.67 as on 30th June 1999, appreciated to 1520.74
as on June 30, 2000, |
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| depicting
an increase of 44.19%. |
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|
| Operating
Results |
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| The
company posted a growth of 125% in net profit to Rs. 91.19 million for the
year from Rs. 40.59 million |
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| of
the previous year. The operating results for the year are as follows: |
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|
(Rupees) |
|
|
|
|
| Investment
Income |
|
64,205,032 |
|
| Operating
Expenses |
|
(8,360,997) |
|
| Reversal
of provision for diminution in the value of marketable securities |
33,228,224 |
|
| Provision
for Taxation - Reversal |
|
2,120,590 |
|
|
|
|
------------------ |
|
| Net
Profit for the Year |
|
91,192,849 |
|
|
|
|
========== |
|
| Proposed
Dividend Per Share |
|
2.10 |
|
|
|
|
========== |
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| Total Dividend |
|
|
52,500,000 |
|
|
|
|
========== |
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|
| During
the year, the company realized capital gains of Rs. 45.09 million, dividend
income of Rs. 11.99 |
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| million
and other income of Rs. 7.12 million. The remaining provision for diminution
in the value of |
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| marketable
securities from previous years was also fully reversed, as it was no longer
required. |
|
|
| Portfolio
Performance Relative to KSE-100 Index |
|
| Alhamdolillah,
the portfolio of the company once again managed to outperform the KSE-100
Index. It was by |
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| all
means a very significant achievement as it was the fourth consecutive year
that our portfolio |
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| outperformed
the benchmark index. None of the other investment companies in the country
has managed to |
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| outperform
the benchmark KSE-100 index every year for the last four years. |
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| The
KSE-100 Index appreciated by 44.19% during the year ended June 30, 1999. On
the other hand, total |
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| return
on fund portfolio was 54.01%. Thus the portfolio outperformed the benchmark
index by 982 basis |
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| points
resulting in incremental income of Rs. 20.18 million. It may be noted here
that the company's. |
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| exposure
to the stocks during the year has ranged between 60% to 90% of the net
assets, signifying a low risk |
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| strategy.
Hence the out performance has purely been an outcome of prudent security
selection and excellent |
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| market
timing. The company has so far completed four full years of operations and a
summary of relative |
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| portfolio
performance is as follows: |
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|
|
|
June 30, 1997 |
June 30, 1998 |
June 30, 1999 |
June 30, 2000 |
|
|
|
|
|
| Net
Asset Value Per Share |
10.00 |
7.24 |
8.22 |
10.55 |
|
|
| Dividend Paid |
|
1.18 |
-- |
0.64 |
2.10 |
|
|
| Total
Return on Fund Portfolio (%) |
12.36 |
(27.60) |
22.38 |
54.01 |
|
|
| KSE-100 Index |
|
1565.73 |
879.62 |
1054.67 |
1520.74 |
|
|
| Return
on Index (%) |
(8.08) |
(43.82) |
19.90 |
44.19 |
|
|
| Portfolio
outperformance (%) |
20.44 |
16.22 |
2.48 |
9.82 |
|
|
|
| Composition
of Assets |
|
| On
June 30, 2000 the composition of net assets of your company at market value
was as under: |
|
|
| The
top five holdings of the Company as on June 30, 2000 based on market values
were as follows: |
|
|
| Company |
|
|
Market Value |
Percentage of |
|
|
|
|
(Rs. in million) |
Net Assets |
|
|
| Pakistan
State Oil Limited |
|
|
39.8 |
15.11 |
|
| Pakistan
Telecommunication Co. Limited |
|
25.9 |
9.83 |
|
| Hub
Power Company Limited |
|
|
23.8 |
9.06 |
|
| Lever
Brothers Pakistan Limited |
|
|
21.1 |
8.02 |
|
| Shell
Pakistan Limited |
|
|
19.0 |
7.22 |
|
|
|
| Board
of Directors |
|
| Mr.
Nasim Beg representing NIT resigned and was replaced by Mr. Istaqbal Mehdi.
Syed Mazher lqbal |
|
| representing
Pakistan Kuwait Investment Company (Pvt.) Limited also resigned and was
replaced by Mr. |
|
| Mazhar
Sharif. Mr. Shafiq A. Khan joined as a Director representing Muslim
Commercial Bank Limited. |
|
| Subsequent
to the year end, Mr. Anthony John Morgan and Mr. Razi-ur-Rehman Khan
representing Jardine |
|
| Fleming
Investment Management International Limited resigned and were replaced by Mr.
Arif-ul-lslam and |
|
| Ms.
Hina Akhlaq representing A1 Meezan Investment Bank Limited arid Pakistan
Kuwait Investment |
|
| Company
(Pvt.) Limited respectively. The Directors wish to place oil record valuable
services rendered to |
|
| the
Company by Mr. Nasim Beg, Syed Mazher lqbal, Mr. Anthony John Morgan and Mr.
Razi-ur-Rehman |
|
| Khan
and welcome the new Directors. |
|
|
| Acknowledgement |
|
| We
offer our sincere gratitude to the Board of Directors for their continued
guidance and support. We also |
|
| wish
to place on record our appreciation for the auditors, shareholders,
Securities & Exchange Commission |
|
| of
Pakistan and investment adviser of the Company. |
|
|
|
Mohammad Shoaib |
|
Dr. Amjad Waheed |
|
|
Chief Executive |
|
Director |
|
|
| Karachi:
October 21, 2000 |
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|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Al-Meezan Mutual Fund Limited as at
June 30, 2000 and the |
|
| related
profit and loss account, statement of changes in equity and cash flow
statement, together with the |
|
| notes
forming part thereof, for the year then ended 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 purposes
of our audit and, |
|
| after
due verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required by the |
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| Companies
Ordinance, 1984 and rule 16 of the Investment Companies and Investment |
|
| Advisers
Rules, 1971; |
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|
|
| (b)
in our opinion: |
|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
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| been
drawn up in conformity with the Companies Ordinance. 1984 and in |
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| accordance
with the provisions of the second schedule to the Investment Companies |
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| and
Investment Advisers Rules. 1971 and are in agreement with the books of |
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| account
and are further in accordance with accounting policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purposes of the
company's |
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| business; and |
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|
|
|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the |
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| year
were in accordance with the objects of the company; |
|
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to |
|
| us,
the balance sheet, profit and loss account, statement of change in equity and
the cash |
|
| flow
statement together with the notes forming part thereof, give the information
required by |
|
| the
Companies Ordinance, 1984 and the Investment Companies and Investment
Advisers |
|
| Rules,
1971 in the manner so required and respectively give a true and fair view of
the state |
|
| of
the company's affairs as at June 30, 2000 and of the profit, changes in
equity and the cash |
|
| flows
for the year then ended; and |
|
|
|
|
|
| (d)
in our opinion zakat deductible at source under the Zakat and Ushr Ordinance,
1980 was |
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| deducted
by the company and was deposited in tile Central Zakat Fund established under |
|
| section
7 of the Ordinance. |
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|
|
|
|
|
A. F. FERGUSON & CO. |
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| Karachi:
October 30, 2000 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
| ASSETS |
|
|
|
| LONG
TERM DEPOSIT |
|
|
300,000 |
300,000 |
|
|
|
| CURRENT
ASSETS |
|
| Marketable
securities |
|
3 |
212,612,202 |
167,912,782 |
|
| Accounts
receivable - unsecured and considered good |
3,103,303 |
27,891,813 |
|
| Other
receivables |
|
4 |
8,325,720 |
5,008,584 |
|
| Bank balances |
|
5 |
85,588,173 |
55,070,078 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
309,629,398 |
255,883,257 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
|
309,929,398 |
256,183,257 |
|
|
|
|
| LIABILITIES |
|
|
|
|
|
| LONG
TERM LIABILITY |
|
6 |
-- |
939,301 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of a long term liability |
6 |
939,301 |
939,301 |
|
| Due
to the Investment Adviser- an associated undertaking |
7 |
6,526,299 |
4,110,226 |
|
| Creditors,
accrued expenses and other liabilities |
8 |
5,759,673 |
28,683,153 |
|
| Proposed
dividend |
|
|
52,500,000 |
16,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
65,725,273 |
49,732,680 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
LIABILITIES |
|
|
65,725,273 |
50,671,981 |
|
|
|
|
------------------ |
------------------ |
|
| NET ASSETS |
|
|
244,204,125 |
205,511,276 |
|
|
========== |
========== |
|
|
| SHAREHOLDERS'
EQUITY |
|
| Authorized
and issued, subscribed and paid-up share capital |
|
| 25,000,000
ordinary shares of Rs. 10 each fully paid in cash |
250,000,000 |
250,000,000 |
|
| Accumulated
loss |
|
|
(5,795,875) |
(44,488,724) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
244,204,125 |
205,511,276 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammad Shoaib |
|
Dr. Amjad Waheed |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| INVESTMENT
INCOME |
|
| Capital
gain / (loss) |
|
9 |
45,085,438 |
(31,485,557) |
|
| Dividend
income |
|
|
11,999,440 |
11,830,751 |
|
| Other income |
|
10 |
7,120,154 |
10,265,510 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
64,205,032 |
(9,389,296) |
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
expenses |
|
11 |
1,834,698 |
1,521,795 |
|
| Remuneration
to the Investment Adviser |
7 |
6,526,299 |
4,110,226 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,360,997 |
5,632,021 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
55,844,035 |
(15,021,317) |
|
|
|
|
| Reversal
of provision for diminution in the value of |
|
| marketable
securities |
|
33,228,224 |
57,730,319 |
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
89,072,259 |
42,709,002 |
|
|
|
|
|
| PROVISION
FOR TAXATION |
|
| Current
- for the year |
|
|
-- |
2,120,590 |
|
| - for the prior year |
|
|
(2,120,590) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(2,120,590) |
2,120,590 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION FOR THE YEAR |
|
91,192,849 |
40,588,412 |
|
|
|
|
========== |
========== |
|
| Basic
earning per share |
|
17 |
3.65 |
1.62 |
|
|
|
|
========== |
========== |
|
| Dividend
per share |
|
|
2.10 |
0.64 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammad Shoaib |
|
Dr. Amjad Waheed |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
SHARE |
(ACCUMULATED |
TOTAL |
|
|
CAPITAL |
LOSS)/ |
|
|
|
|
UNAPPROPRIATED |
|
|
|
|
PROFIT |
|
|
|
|
|
|
|
Rupees |
|
|
|
| Balance
as at June 30, 1998 |
|
250,000,000 |
(69,077,136) |
180,922,864 |
|
| Net
profit for the year ended June 30, 1999 |
-- |
40,588,412 |
40,588,412 |
|
| Proposed
dividend (Re. 0.64 per share) |
-- |
( 16,000,000 |
(16,000,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 1999 |
|
250,000,000 |
(44,488,724 |
205,511,276 |
|
|
| Net
profit for the year ended June 30, 2000 |
-- |
91,192,849 |
91,192,849 |
|
| Proposed
Dividend (Rs. 2.10 per share) |
-- |
(52,500,000) |
(52,500,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2000 |
|
250,000,000 |
(5,795,875) |
244,204,125 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammad Shoaib |
|
Dr. Amjad Waheed |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
89,072,259 |
42,709,002 |
|
|
|
|
|
| Adjustments
for: |
|
|
| Reversal
of provision for diminution in the |
|
|
| value
of marketable securities |
|
(33,228,224) |
(57,730,319) |
|
| Dividend
income |
|
(11,999,440) |
(11,830,751) |
|
| Financial
income |
|
(7,045,154) |
(10,210,510) |
|
| Dividends
received |
|
12,329,948 |
11,486,896 |
|
| Financial
income received |
|
8,157,808 |
9,094,745 |
|
|
|
------------------ |
------------------ |
|
| Profit
/ (loss) before changes in working capital |
|
57,287,197 |
(16,480,937) |
|
|
| (Increase)
/ decrease in current assets |
|
| Marketable
securities |
|
(11,471,196) |
(4,519,889) |
|
| Accounts
receivable |
|
24,788,510 |
23,154,014 |
|
| Other
receivables |
|
-- |
100,000 |
|
|
|
------------------ |
------------------ |
|
|
|
|
13,317,314 |
18,734,125 |
|
|
|
|
| Increase
/ (decrease) in current liabilities |
|
|
|
| Due
to the Investment Adviser- an associated undertaking |
2,416,073 |
1,081,769 |
|
| Creditors,
accrued expenses and other liabilities |
|
(24,371,652) |
12,799,243 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(21,955,579) |
13,881,012 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
48,648,932 |
16,134,200 |
|
| Long
term deposit made |
|
|
-- |
(300,000) |
|
| Taxation paid |
|
|
(2,639,708) |
(1,665,941) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
46,009,224 |
14,168,259 |
|
|
|
