| Asian Stock 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 ANNUAL GENERAL MEETING |
|
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| DIRECTORS'
REPORT |
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| FINANCIAL
HIGHLIGHTS |
|
|
|
| PATTERN
OF HOLDING OF THE SHARES |
|
|
| AUDITORS'
REPORT |
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|
|
| BALANCE
SHEET |
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|
|
| PROFIT
AND LOSS ACCOUNT |
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|
| CASH
FLOW STATEMENT |
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|
|
| STATEMENT
OF CHANGES IN EQUITY |
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| NOTES
TO THE ACCOUNTS |
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| STATEMENT
OF INCOME & EXPENDITURE IN RELATION TO THE INVESTMENT COMPANY |
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| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Zaigham Mehmood Rizvi |
|
| Mr.
Farooq Ismail |
|
| Muhammad
Ali Yacoob |
|
| Mr.
Bashir Blkasm Omer |
|
| Mr.
Ramadan A. Haggiagi |
|
| Ms.
Aaliya K. Dossa |
|
| Mr.
Noman Ahmed Qureshi |
|
|
| CHIEF
EXECUTIVE |
|
| Muhammad
Ali Yacoob |
|
|
| COMPANY
SECRETARY |
|
| Mr.
Merajuddin |
|
|
| MANAGEMENT
COMPANY |
|
| Asian
Capital Management (Pvt.) Limited |
|
|
| BANKERS |
|
| Union
Bank Limited |
|
| Muslim
Commercial Bank Ltd. |
|
| National
Bank of Pakistan |
|
|
| AUDITORS |
|
| M.
Yousuf Adil Saleem & Co. |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISERS |
|
| Mohsin
Tayebaly & Co. |
|
|
| TAX
ADVISERS |
|
| Rahim
Iqbal Rafiq & Company |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE |
|
| 5th
Floor, Block "C" |
|
| Finance
& Trade Centre, |
|
| Shara-e-Faisal |
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| Karachi. |
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|
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the 6th Annual General Meeting of ASIAN STOCKS FUND
LIMITED will |
|
| be
held on December 18, 2000 at 3 p.m. at Rafia Chaudhry Memorial Centre, Sidco
Avenue Centre, |
|
| 264
R. A. Lines, Karachi, to transact the following business :- |
|
|
| 1.
To confirm the Minutes of the last Annual General Meeting of the Company held
on December |
|
| 17, 1999. |
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company together
with the Directors' |
|
| report
thereon for the period ended June 30, 2000. |
|
|
| 3.
To approve Final Cash Dividend of 10% for the year ended June 30, 2000. |
|
|
| 4.
To appoint Auditors of the Company and to fix their remuneration. The present
Auditors M/s. |
|
| YOUSUF
ADIL SALEEM & COMPANY, CHARTERED ACCOUNTANTS, retire and being 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:
November 17, 2000 |
|
SECRETARY |
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|
| NOTES: |
|
|
| 1.
A member entitled to attend and vote at the meeting may appoint a proxy to
attend and vote |
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| instead
of him/her at the meeting. Proxies must be deposited at the Company's
Registered Office |
|
| not
less than 48 hours before the time for holding the meeting. A proxy must be a
member. |
|
|
| 2.
The share transfer books of the Company shall remain closed from December 18,
2000 to December |
|
| 24,
2000 (both days inclusive). |
|
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| 3.
Shareholders are advised to notify of any change in their addresses. |
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|
| DIRECTORS'
REPORT |
|
|
| On
behalf of the Board of Directors, we present the Sixth Annual Report together
with audited accounts |
|
| for
the year ended June 30, 2000. |
|
|
| Operating
Review: |
|
| The
financial year ended June 30, 2000 was a better year for the three stock
exchanges of the country |
|
| including
the general/individual investors and listed equities who hold and manage
their share |
|
| investment
portfolios such as mutual fund companies etc. During the period under review
i.e. from July |
|
| 01,
1999 to June 30, 2000, a massive rally of stocks was witnessed in these stock
markets with a redeeming |
|
| feature
of the highest ever turnover of shares on a single day in the history of the
country. This rally, |
|
| which
was considered to be the second highest boom of this culminating decade,
sustained only for about |
|
| 6
months from October, 1999 to March, 2000 with index reaching from 1200 points
to peak value at |
|
| 2054
points and was mostly' aided by speculative forces in the backdrop of new
policy measures and |
|
| reform
programmes initiated by new government for the revival of economy. |
|
|
| Notwithstanding
of its short life, all sectors of the economy took part in the rally under
the lead of |
|
| fuel/energy,
textiles and bank and investment companies sectors and benefited themselves
with the |
|
| available
opportunity. The income of all listed equities including those in mutual fund
sector increased |
|
| substantially
and as a result, the market witnessed remarkable increase in their
prices/NAVs during |
|
| this
period. The important point noted during the rally was that the support was
largely .seen from |
|
| the
local investors. This was attributed mainly to the availability of funds at
lower interest rates following |
|
| the
excess money supply in the money market during the same period. However, due
to economic |
|
| fundamentals
/ indicators were yet to show the desired results, the local investors,
instead of taking |
|
| long
positions in their portfolios, preferred to liquidate their holdings in
shares at the available existing |
|
| profit
margins. This eased the entry of bulls in the market who dominated it in no
time thereby resulting |
|
| in
the tumbling of prices of almost all equities within a short span. The index
fell drastically to 1400 |
|
| points
during April-May 2000, however, it subsequently managed to reach 1521 points
on June 30, |
|
| 2000
from 1055 points on June 30, 1999 registering an appreciation of 44.19%
during the year under |
|
| review. |
|
|
| During
the period the row between the Government of Pakistan and Hubco remained
unresolved. As |
|
| for
the financial assistance from IMF and World Bank, the government has kept
pursuing these |
|
| institutions
for early release of funds from them to ease pressure on the balance of
payments. |
|
|
| Operating
Results: |
|
| The
net profit of the company rose immensely to Rs. 17.42 million for the year
from Rs. 2.84 million |
|
| of
the previous year. The operating results for the year are as follows: |
|
|
|
(Rupees) |
|
|
|
|
| Investment
Income |
|
12,810,299 |
|
| Operating
Expenses |
|
(1,283,620) |
|
| Reversal
of provision for diminution in the marketable securities |
6,034,047 |
|
| Provision
for Taxation - Reversal |
|
(137,299) |
|
|
----------- |
|
| Net
profit for the Year |
|
17,423,427 |
|
|
========== |
|
| Proposed
Dividend Per Share |
|
1.00 |
|
|
========== |
|
| Total
Dividend |
|
10,000,000 |
|
|
========== |
|
|
|
|
| During
the year, the Company realized capital gains of Rs. 8.08 million, dividend
income of Rs. 3.64 |
|
| million
and other income of Rs. 1.08 million. The remaining provision for diminution
in the value of |
|
| marketable
securities from previous years was also fully reversed, as it was no longer
required. Further, |
|
| against
the appreciation of KSE-100 Index by 44.19% during the period, your Company
has been able |
|
| to
register almost equal growth in its NAV at 43.28%. |
|
|
| The
positive results of the Company have purely resulted from prudent securities
selection, excellent |
|
| market
timing and proper cash management. The cash, which stood at 37.18% of the
total asset in 1998, |
|
| was
chanalized in prudent investment to reduce it to 2.71% only as on June 30,
2000. |
|
|
| Further,
the new management led by Pak-Libya consortium during the period adhered to
the prudent |
|
| policies
of investment and decision making to realize the optimal results from
resources to ensure bright |
|
| future
for the Company in years ahead. With these policies and restructuring of
shares portfolio, inherited |
|
| from
the previous management at the time of acquisition in December 1998, by
replacing ill-liquid and |
|
| less
promising scrips with those of liquid and promising, the Company has been
successful in increasing |
|
| its
NAV from 3.72 (at the time of acquisition) to 5.76 as on June 30, 2000. The
Company has completed |
|
| six
full years of operation with the current year audited accounts. The summary
of relative portfolio |
|
| performance
is submitted hereunder: |
|
|
|
June 30, 95 |
June 30, 96 |
June 30, 97 |
June 30, 98 |
June 30, 99 |
June 30, 00 |
|
| NAV
Per Share |
8.69 |
8.65 |
7.59 |
3.74 |
4.02 |
5.76 |
|
| Dividend
Paid |
0 |
0 |
0 |
0 |
0 |
10% |
|
| KSE-100
Index |
1611.70 |
1703.28 |
1565.73 |
879.62 |
1054.67 |
1520.74 |
|
|
| Acknowledgment: |
|
| 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 officers and staff of the management Company. |
|
|
|
For and behalf of the
Board |
|
|
| Karachi;
November 17, 2000 |
|
Chairman |
|
|
|
| FINANCIAL HIGHLIGHTS |
|
|
|
(Rupees in thousands from
1 to 5) |
|
|
| YEAR
ENDED |
|
2000 |
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
| 1.
CAPITAL GRAIN/(LOSS) |
8,080 |
(12,908) |
(34,105) |
(4,502) |
(66) |
(3,893) |
|
| 2.
DIVIDEND INCOME |
|
3,642 |
5,468 |
4,728 |
3,237 |
1,231 |
818 |
|
| 3.
OTHER INCOME |
|
1,087 |
521 |
125 |
660 |
1,019 |
3,134 |
|
| 4.
OPERATING EXPENSES |
|
1,283 |
1,996 |
2,154 |
3,230 |
3,517 |
2,732 |
|
| 5.
PROFIT/(LOSS)' AFTER |
|
|
|
| TAXATION |
|
17,423 |
2,844 |
(38,561) |
(10,669) |
(327) |
(13,090) |
|
| 6. EPS |
|
1.74 |
0.28 |
(3.86) |
(1.07) |
(0.03) |
(1.31) |
|
| 7.
DIVIDEND % |
|
10 |
-- |
-- |
-- |
-- |
-- |
|
| 8.
KSE 100 INDEX |
|
1520.74 |
1054.67 |
879.62 |
1565.73 |
1703.28 |
1611.70 |
|
| 9.
NET ASSET VALUE (RS.) |
5.76 |
4.02 |
3.74 |
7.59 |
8.65 |
8.69 |
|
| 10.
APPRECIATION |
|
| (DEPRECIATION
IN NAN (%) |
43.28 |
7.49 |
(50.72) |
(12.25) |
(0.46) |
-- |
|
|
|
| PATTERN
OF SHAREHOLDING |
|
| FORM
"34" |
|
| SHAREHOLDERS
STATISTICS |
|
| As
at June 30, 2000 |
|
|
|
| Number of |
|
Share |
|
Total |
|
| Shareholders |
From |
Holding |
To |
Shares Held |
|
| 30 |
1 |
-- |
100 |
3,000 |
|
| 1398 |
101 |
-- |
500 |
694,300 |
|
| 67 |
501 |
-- |
1000 |
67,000 |
|
| 60 |
1001 |
-- |
5000 |
184,600 |
|
| 7 |
5001 |
-- |
10000 |
53,500 |
|
| 1 |
10001 |
-- |
15000 |
15,000 |
|
| 3 |
15001 |
-- |
20000 |
60,000 |
|
| 1 |
20001 |
-- |
25000 |
25,000 |
|
| 2 |
45001 |
-- |
50000 |
100,000 |
|
| 1 |
170001 |
-- |
175000 |
172,500 |
|
| 2 |
245001 |
-- |
250000 |
500,000 |
|
| 1 |
370001 |
-- |
375000 |
372,000 |
|
| 1 |
695001 |
-- |
700000 |
700,000 |
|
| 1 |
995001 |
-- |
1000000 |
1,000,000 |
|
| 1 |
1925001 |
-- |
1930000 |
1,927,500 |
|
| 1 |
4125001 |
-- |
4130000 |
4,125,600 |
|
| ------------ |
------------ |
------------ |
------------ |
------------ |
|
| 1577 |
|
10,000,000 |
|
| ========== |
========== |
========== |
========== |
========== |
|
|
|
| CATEGORIES
OF |
|
NUMBER OF |
TOTAL |
|
|
| SHAREHOLDERS |
|
SHAREHOLDERS |
SHARES |
PERCENTAGE |
|
|
|
HELD |
|
|
| INDIVIDUALS |
|
1565 |
1,184,500 |
11.84 |
|
| INVESTMENT
COMPANIES |
8 |
6,862,900 |
68.63 |
|
| JOINT
STOCK COMPANY |
|
1 |
1,000,000 |
10.00 |
|
| FINANCIAL
INSTITUTIONS |
2 |
950,000 |
9.50 |
|
| MODARABA
COMPANY |
|
1 |
2,600 |
0.03 |
|
|
------------ |
------------ |
------------ |
|
|
1577 |
10,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ASIAN STOCK FUND LIMITED as at June
30, |
|
| 2000
and the related profit and loss account and cash flow statement and statement
of changes in |
|
| equity
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: |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved |
|
| accounting
standards and the requirements of the Companies Ordinance, 1984 and the
Investment |
|
| Companies
and Investment Adviser's Rules, 1971. Our responsibility is to express an
opinion on these |
|
| statements
based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements are free of any material misstatement. An audit
includes examining, on |
|
| a
test basis, evidence supporting the amounts and disclosures in the above said
statements. An audit |
|
| also
includes assessing the accounting policies and significant estimates made by
management, as |
|
| well
as, evaluating the overall presentation of the above said statements. We
believe that our audit |
|
| provides
a reasonable basis for our opinion and, after due verification, we report
that: |
|
|
| a.
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984, and Rule 16 of the Investment Companies and Investment |
|
| Adviser's
Rules, 1971; |
|
|
| b.
in our opinion: |
|
|
| i.
the balance sheet and profit and loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984, and Investment Companies |
|
| and
Investment Adviser's Rules, 1971 and are in agreement with the books of
account |
|
| and
are further in accordance with accounting policies consistently applied; |
|
|
| ii.
the expenditure incurred during the year was for the purpose of the Company's
business; |
|
| and |
|
|
| iii.
the business conducted, investments made and the expenditure incurred during
the 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 explanation given to |
|
| us,
the balance sheet, profit and loss account, cash flow statement and statement
of changes |
|
| in
equity together with the notes forming part thereof confirm with approved
accounting |
|
| standards
as applicable in Pakistan, and, give the information required by the
Companies |
|
| Ordinance,
1984 and the Investment Companies and Investment Adviser's 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, its cash flows and changes in equity
for the year |
|
| then
ended; and |
|
|
| d.
in our opinion no zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII |
|
| of 1980). |
|
|
|
M. Yousuf Adil Saleem & Co. |
|
| Karachi:
November 17, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| ASSETS |
|
| Deferred
expenditure |
|
3 |
-- |
337,561 |
|
| CURRENT
ASSETS |
|
|
|
| Marketable
equity securities |
|
4 |
52,134,966 |
31,278,429 |
|
| Advance
income tax |
|
921,599 |
970,005 |
|
| Dividend/Profit
receivables - considered good |
|
1,171,250 |
1,126,450 |
|
| Receivable
from brokers |
|
4,490,373 |
-- |
|
| Bank
balances |
|
|
|
| in
current account |
|
12,947 |
12,947 |
|
| in
PLS accounts |
|
1,634,535 |
10,130,794 |
|
|
----------- |
----------- |
|
|
60,365,670 |
43,518,625 |
|
|
----------- |
----------- |
|
| TOTAL
ASSETS |
|
60,365,670 |
43,856,186 |
|
| LIABILITIES |
|
| CURRENT
LIABILITIES |
|
| Current
maturity of deferred expenditure payable |
|
337,561 |
810,140 |
|
| Due
to investment adviser |
|
5 |
631,981 |
918,664 |
|
| Accrued
expenses |
|
6 |
93,426 |
30,000 |
|
| Payable
to broker |
|
164,283 |
-- |
|
| Provision
for taxation |
|
1,520,209 |
1,565,108 |
|
|
----------- |
----------- |
|
|
2,747,460 |
3,323,912 |
|
| OTHER
LIABILITIES |
|
|
|
| Deferred
expenditure payable |
|
7 |
-- |
337,561 |
|
|
|
----------- |
----------- |
|
| TOTAL
LIABILITIES |
|
|
(2,747,460) |
(3,661,473) |
|
|
|
|
----------- |
----------- |
|
| NET
ASSETS |
|
|
57,618,210 |
40,194,713 |
|
|
|
|
========== |
========== |
|
| SHAREHOLDERS
EQUITY |
|
8 |
57,618,210 |
40,194,713 |
|
|
|
========== |
========== |
|
| CONTINGENCIES |
|
9 |
|
|
| The
annexed notes form i to 19 form an integral part of these accounts |
|
|
|
MUHAMMAD ALI YACOOB |
|
BASHIR BLKASM OMER |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Income |
|
| Dividend
income - net of zakat |
|
3,642,476 |
5,468,937 |
|
| Return
on bank deposits |
|
1,087,215 |
521,597 |
|
| Capital
Gain/(loss) on marketable securities |
10 |
8,080,608 |
(12,906,094) |
|
|
----------- |
----------- |
|
|
12,810,299 |
(6,915,560) |
|
|
| Operating
expenses |
|
| Remuneration
to Investment Adviser |
|
5.1 |
576,182 |
803,894 |
|
| Custodian
charges |
|
166,623 |
133,395 |
|
| Amortization
of deferred expenditure |
|
337,561 |
810,140 |
|
| Listing fee |
|
92,500 |
92,500 |
|
| Audit fee |
|
50,000 |
30,000 |
|
| interest
on deferred expenditure |
|
52,399 |
114,770 |
|
| Bank
charges |
|
1,955 |
1,620 |
|
| Others |
|
6,400 |
9,951 |
|
|
----------- |
----------- |
|
|
(1,283,620) |
(1,996,270) |
|
|
----------- |
----------- |
|
| Profit/(Loss)
for the year |
|
11,526,679 |
(8,911,830) |
|
| Reversal
of diminution in value of marketable securities |
|
6,034,047 |
12,206,976 |
|
|
----------- |
----------- |
|
| Profit
before taxation |
|
17,560,726 |
3,295,146 |
|
| Provision
for taxation |
|
|
|
| Current year |
|
541,156 |
451,019 |
|
| Prior years |
|
11 |
(403,927) |
-- |
|
|
----------- |
----------- |
|
|
137,229 |
451,019 |
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
17,423,497 |
2,844,127 |
|
| Accumulated
loss brought forward |
|
(59,805,287) |
(62,649,414) |
|
|
----------- |
----------- |
|
| Accumulated
loss carried forward |
|
(42,381,790) |
(59,805,287) |
|
|
=========== |
=========== |
|
| Earnings
per share |
|
12 |
1.74 |
0.28 |
|
|
| The
annexed notes form 1 to 19 form an integral part of these accounts |
|
|
|
MUHAMMAD ALI YACOOB |
|
BASHIR BLKASM OMER |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
17,560,726 |
3,295,146 |
|
| Adjustments
for :- |
|
|
|
| Amortization
of deferred expenditure |
|
337,561 |
810,140 |
|
| Reversal
of diminution in value of |
|
|
|
| marketable
securities |
|
(6,034,047) |
(12,206,976) |
|
| Interest
on deferred expenditure |
|
52,399 |
114,770 |
|
|
------------ |
------------ |
|
|
(5,644,087) |
(11,282,066) |
|
|
------------ |
------------ |
|
|
11,916,639 |
(7,986,920) |
|
| Effect
on cash flow due to working capital changes |
|
| (Increase)/decrease
in current assets |
|
| Marketable
securities |
|
(14,822,490) |
4,874,424 |
|
| Receivable
from brokers |
|
(4,490,373) |
-- |
|
| Dividend
/ Profit receivable |
|
(44,800) |
(1,078,431) |
|
|
------------ |
------------ |
|
|
(19,357,663) |
3,795,993 |
|
|
| Increase
in current liabilities |
|
| Due
to Investment Adviser |
|
579,582 |
803,894 |
|
| Payable
to broker |
|
164,283 |
-- |
|
| Accrued
expense |
|
63,426 |
-- |
|
|
------------ |
------------ |
|
|
807,291 |
803,894 |
|
|
------------ |
------------ |
|
| Cash
used in operations |
|
(6,633,733) |
(3,387,033) |
|
| Paid
to investment adviser |
|
(918,664) |
(942,796) |
|
| Taxes paid |
|
(133,722) |
(152,159) |
|
|
------------ |
------------ |
|
| Net
cash used in operating activities |
|
(7,686,119) |
(4,481,988) |
|
|
------------ |
------------ |
|
| B.
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Deferred
liability repaid |
|
(810,140) |
(810,140) |
|
|
------------ |
------------ |
|
| Net
cash used in financing activities |
|
(810,140) |
(810,140) |
|
|
------------ |
------------ |
|
