| BSJS Balance Fund Limited |
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| Annual
Report 1999-2000 |
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| TABLE
OF CONTENTS |
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| COMPANY
INFORMATION |
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| COMPANY'S
FIVE-YEAR REVIEW |
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| DIRECTORS'
REPORT |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| FINANCIAL
STATEMENTS |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| DISTRIBUTION
STATEMENT |
|
| MOVEMENT
IN EQUITY AND RESERVES |
|
| CASH
FLOW STATEMENT |
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| NOTES
TO THE ACCOUNTS |
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| INCOME
& EXPENDITURE OF INVESTMENT |
|
| ADVISER
IN RELATION TO THE |
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| INVESTMENT
COMPANY |
|
| PATTERN
OF SHAREHOLDING |
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| NOTICE
OF MEETING |
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| Company
Information |
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| Board
of Directors |
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|
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| Chairman |
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Mr. M. W. Farooqui |
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| Directors |
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Mr. Abid Hussain Zuberi |
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Shaikh Mukhtar Ahmed |
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Mr. Ayaz-ul-Haque |
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Mr. Munaf Ibrahim |
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Mian Raza Mansha |
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| Chief Executive |
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Mr. M. Habib-ur-Rahman |
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| Company
Secretary |
Saiyid Azher Alam |
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| Investment
Adviser |
ABAMCO Limited |
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| Auditors |
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Taseer Hadi Khalid &
Co. |
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Chartered Accountants |
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| Legal Adviser |
|
Aman Law Associates |
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| Custodian |
|
Muslim Commercial Bank
Limited |
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| Bankers |
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Bank Al-Habib Limited |
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|
Metropolitan Bank Limited |
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Muslim Commercial Bank
Limited |
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| Registered
Office |
1306-1307, Chapal Plaza |
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|
Hasrat Mohani Road |
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|
Karachi-74000, Pakistan |
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|
Tel: (92-21) 2441311-14
Fax: (92-21) 2425652 |
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| Share
Department |
Uni Corporate &
Financial Services |
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|
Westland Trade Centre,
Opposite Flyover |
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|
Shaheed-e-Millat Road |
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|
Karachi-75350, Pakistan. |
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|
Tel: (92-21) 4313205-06
Fax: (92-21) 4313207 |
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| Company's
Five-year Review |
|
|
| What is BBF? |
|
| BBF
is a closed-end mutual fund with investment strategy that makes it a balanced
fund. |
|
|
| What
is a balanced fund? |
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| A
balanced fund is a versatile investment program... in a single investment. |
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| Through
a portfolio of rigorously screened and monitored stocks, debt securities and
short-term |
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| instruments,
a balanced fund gives the investment a chance to perform two important jobs,
to grow and |
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| to
produce income. |
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|
| Listing |
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| BBF's
shares were offered for' public subscription on January 14, 1996. It is
listed at the Karachi Stock |
|
| Exchange
(KSE) from March 3, 1996. |
|
|
| How
has BBF performed? |
|
|
|
| *
At a glance... BBF's five years |
|
|
| Year Ended |
|
June 30, |
June 30, |
June 30, |
June 30, |
August 8, |
|
|
2000 |
1999 |
1998 |
1997 |
1995 to |
|
|
|
June 30, 1996 |
|
|
| Net
Profit (Rs. in '000) |
50,760 |
15,067 |
11,961 |
19,694 |
(33) |
|
| NAV
- Year End (Rs.) |
11.75 |
10.83 |
10.03 |
10.60 |
10.10 |
|
| Rate
of Dividend (%) |
31 |
10 |
8 |
13 |
-- |
|
| Total
Return (%) |
37.12 |
17.95 |
2.17 |
17.82 |
1.00 |
|
| KSE
100 Index - Year End |
1,520.74 |
1,054.67 |
879.62 |
1,565 |
1,703 |
|
| Appreciation/(Depreciation) |
|
|
|
|
|
| in
KSE 100 Index (%) |
44.19 |
19.90 |
(43.79) |
(8.10) |
(6.95) |
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|
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|
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| *
Share price and turnover |
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| Year ended |
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|
Share prices |
|
Turnover |
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|
|
|
High (Rs.) |
Low (Rs.) |
Shares |
|
|
|
|
|
|
|
| 30/06/96 |
|
|
10.00 |
9.65 |
-- |
|
|
| 30/06/97 |
|
|
10.25 |
7.90 |
12,500 |
|
| 30/06/98 |
|
|
8.50 |
5.00 |
347,500 |
|
| 30/06/99 |
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|
5.50 |
4.20 |
519,290 |
|
| 30/06/00 |
|
|
8.05 |
4.00 |
3,003,000 |
|
|
| Mutual
fund rating |
|
| BBF
has been assigned AA (f) rating by PACRA, which denotes fund's ability to
consistently outperform |
|
| its
peers with strong capacity to respond to future opportunities or stress
situations. |
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|
|
| Directors'
Report |
|
|
| The
Board of Directors of the BSJS Balanced Fund Limited (BBF), presents the
Sixth Annual Report of |
|
| the
Company together with the Audited Accounts for the year ended June 30, 2000. |
|
|
| 1.
OPERATING RESULTS |
|
|
| (I)
Profit during the year |
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| The
Company earned a net profit of Rs. 50.760 million (1999: Rs. 15.067 million),
that translates into an |
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| earning
per share of Rs. 3.38 (1999: Rs.1.00 per share). Your directors recommend a
cash dividend of |
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| 31%
i.e. Rs. 3.10 per share (1999: 10% i.e. Rs. 1.00 per share). Rs. 46.50
million have been |
|
| appropriated
as dividend (1999: Rs. 15 million), which works out to 91.60% pay-out (1999:
99.6%) for |
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| the
year. A sum of Rs. 4.4 million has been carried forward to the next year. As
over ninety percent of |
|
| the
net profit of the Company has been appropriated for distribution as dividend
to shareholders, there is |
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| no
liability for income tax under clause 102D part I of the Second Schedule of
the Income Tax |
|
| Ordinance,
1979. |
|
|
| (II)
Composition of Assets |
|
| On
June 30, 2000, the composition of assets of your Company, at their market
values was as under: |
|
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|
June 30,
2000 |
June 30,
1999 |
|
|
Rs. |
Percent |
Rs. |
Percent |
|
|
in million |
(%) |
in million |
(%) |
|
|
| Equity
securities |
86.112 |
38 |
90.965 |
49 |
|
| Term
finance certificates |
28.214 |
12 |
31.000 |
17 |
|
| Investment
on markup basis |
-- |
-- |
15.000 |
8 |
|
| Receivable
on sale of shares |
101.706 |
45 |
40.000 |
22 |
|
| Receivable
against income |
3.828 |
1 |
6.528 |
3 |
|
| Cash
at banks in PLS accounts |
8.582 |
4 |
0.865 |
1 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
228.442 |
100 |
184.358 |
100 |
|
|
========== |
========== |
========== |
========== |
|
|
| During
the year return available from money market was not very attractive. The
Company's funds were, |
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| therefore,
moved from investment in money market instruments to equity securities. The
decline of |
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| income
from money market was more than offset by handsome increase in income from
capital gains |
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| which
the Company realized from sale of equity securities. |
|
|
| 2.
PERFORMANCE RELATIVE TO KSE INDEX |
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| The
KSE 100 Index appreciated by 44.19% during the year ended June 30, 2000. The
net asset value |
|
| (NAV)
of the shares of your Company improved from Rs. 10.83 on June 30, 1999 to Rs.
11.75 on June |
|
| 30,
2000. Together with dividend pay-out, this reflects a return of 37.12%. BBF
is a balanced fund and a |
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| portion
of its investment is in fixed income securities which do not move with the
KSE Index. All along, |
|
| our
strategy has been to achieve our long-term investment perspective of reducing
volatility and focusing |
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| on
regular flow of income. |
|
|
| Your
Company will continue with the strategy of diversifying investment in
short-term instruments and |
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| debt
securities with regular return and in equity of companies with dividend
paying record and growth |
|
| prospects,
so as to ensure a constant flow of income without erosion in the value of
investment. BBF is |
|
| well-positioned
to enter the market when equities of companies with a good track record offer
attractive |
|
| valuations.
This strategy will hopefully allow BBF to provide security and profitability
to the shareholders |
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| without
foregoing growth. |
|
|
| 3. AUDITORS |
|
| Messrs.
Taseer Hadi Khalid & Co., Chartered Accountants retire, and being
eligible, offer themselves for |
|
| re-appointment. |
|
|
| 4.
SHAREHOLDERS |
|
| A
statement showing pattern of shareholding in the Company as on June 30, 2000
is given on page 24 |
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| of this Report. |
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| 5. THANKS |
|
| The
Board of Directors of the Company thanks the Securities and Exchange
Commission of Pakistan for |
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| their
valuable support, understanding and guidance. |
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|
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|
For and on behalf of the Board |
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|
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|
(M. Habib-ur-Rahman) |
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| Karachi:
July 15, 2000 |
|
Chief Executive |
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|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of BSJS Balanced Fund Limited as at
June 30, 2000 and |
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| the
related Profit and Loss Account and Cash Flow Statement together with the
notes to the accounts |
|
| for
the year then ended and we state that we have obtained all the information
and explanations which |
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| to
the best of our knowledge and belief were necessary for the purpose of our
audit and 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 the Investment Companies and Investment Advisers Rules, |
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| 1971; |
|
|
|
|
|
|
| (b)
In our opinion: |
|
|
|
| (i)
The Balance Sheet and Profit and Loss Account together with the notes thereon
have been |
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| drawn
up in conformity with the Companies Ordinance, 1984 and the Investment |
|
| Companies
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 purpose of the Company's
business; |
|
|
| (iii)
The business conducted, investments made and expenditure incurred during the
year were |
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| 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 and the Profit and Loss Account and the Cash Flow together with
the notes |
|
| forming
part thereof give the information required by the Companies Ordinance, 1984
and |
|
| 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 and changes in the financial position for the year ended on
that date; |
|
|
|
|
| (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 deposited in the Central Zakat Fund established under
Section 7 |
|
| of
that Ordinance. |
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|
|
|
|
|
Taseer Hadi Khalid & Co. |
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| Karachi:
July 15, 2000 |
|
Chartered Accountants |
|
|
|
|
|
|
|
|
|
Financial Statements |
|
|
|
|
| Balance
Sheet as at June 30, 2000 |
|
|
| Assets |
|
Note |
2000 |
1999 |
|
|
|
|
| Marketable
Securities |
|
|
|
| Equity
securities |
|
|
68,331,066 |
78,884,608 |
|
| Term
finance certificates |
|
|
27,243,400 |
31,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
6 |
95,574,466 |
109,884,608 |
|
| Other Assets |
|
|
|
| Other
investments |
|
|
-- |
15,000,000 |
|
| Trade
debts - considered good |
|
7 |
101,705,590 |
40,000,000 |
|
| Advances
and other receivables |
|
8 |
3,827,972 |
6,528,542 |
|
| Cash
and bank balances |
|
9 |
8,582,198 |
864,690 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
114,115,760 |
62,393,232 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
209,690,226 |
172,277,840 |
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
| Current
maturity of deferred |
|
|
|
|
| expenditure
payable |
|
3 |
1,184,117 |
1,184,115 |
|
| Due
to Investment Adviser |
|
4 |
7,019,660 |
3,592,860 |
|
| Dividend
payable |
|
|
7,407 |
3,263 |
|
| Accounts
payable and accrued |
|
|
|
| expenses |
|
5 |
239,545 |
367,530 |
|
| Proposed
dividend |
|
|
46,500,000 |
15,000,000 |
|
| Provision
for taxation |
|
|
289,541 |
756,391 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
55,240,270 |
20,904,159 |
|
|
|
|
| Other
Liabilities |
|
|
|
| Deferred
expenditure payable |
|
3 |
-- |
1,184,117 |
|
|
|
|
------------------ |
------------------ |
|
|
|
55,240,270 |
22,088,276 |
|
|
|
|
------------------ |
------------------ |
|
| Net Assets |
|
|
154,449,956 |
150,189,564 |
|
|
|
|
========== |
========== |
|
| Represented
By: |
|
|
|
|
| Shareholders'
Equity |
|
Rupees |
154,449,956 |
150,189,564 |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the |
|
| attached notes. |
|
|
|
M. Habib-ur-Rahman |
|
|
Munaf Ibrahim |
|
|
Chief Executive |
|
|
Director |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended June 30, 2000 |
|
|
| Operating
Income |
|
Note |
2000 |
1999 |
|
|
|
|
| Capital gain |
|
10 |
44,434,194 |
(10,449,760) |
|
| Dividend
income |
|
11 |
6,768,409 |
7,581,626 |
|
| Markup
on bank deposits |
|
|
2,342,843 |
3,972,500 |
|
| Profit
on money market transactions |
|
|
1,004,342 |
3,675,904 |
|
| Profit
on term finance certificates |
|
|
5,306,077 |
2,941,008 |
|
| Other income |
|
|
75,000 |
10,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
59,930,865 |
7,731,278 |
|
|
|
|
|
| Reversal/(Provision)
for diminution in |
|
|
| value
of marketable securities on |
|
|
|
| individual
investment basis |
|
|
711,379 |
11,165,619 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
60,642,244 |
18,896,897 |
|
|
|
|
| Operating
Expenses |
|
|
| Administrative |
|
12 |
1,562,706 |
705,227 |
|
| Financial |
|
13 |
2,065,996 |
499,665 |
|
| Remuneration
to Investment Adviser |
|
4.1 |
6,720,000 |
3,150,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,348,702 |
4,354,892 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
50,293,542 |
14,542,005 |
|
|
|
|
| Taxation
- excess provision for prior years |
|
|
466,850 |
525,487 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit for the year |
|
Rupees |
50,760,392 |
15,067,492 |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
M. Habib-ur-Rahman |
|
|
Munaf Ibrahim |
|
|
Chief Executive |
|
|
Director |
|
|
|
| Distribution
Statement |
|
| For
the year ended June 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
|
| Undistributed
profit as of July 1, 1999 (1998) |
|
|
189,564 |
122,072 |
|
| Net
profit for the year |
|
|
50,760,392 |
15,067,492 |
|
|
|
|
|
|
| Appropriation: |
|
|
|
|
| Final
cash dividend @ 31% |
|
|
|
|
| (1999: 10%) |
|
|
(46,500,000) |
(15,000,000) |
|
|
|
|
------------------ |
------------------ |
|
| Undistributed profit
as at June 30, 2000 (1999) |
|
Rupees |
4,449,956 |
189,564 |
|
|
|
|
========== |
========== |
|
|
|
M. Habib-ur-Rahman |
|
|
Munaf Ibrahim |
|
|
Chief Executive |
|
|
Director |
|
|
|
| Movement
in Equity and Reserves |
|
| for
the year ended June 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
| Net
assets as at July 1, 1999 (1998) |
|
|
| Share capital |
|
|
150,000,000 |
150,000,000 |
|
| Accumulated profit |
|
|
189,564 |
122,072 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
150,189,564 |
150,122,072 |
|
|
|
|
| Undistributed
income/ |
|
|
|
| (distribution
exceeding income) for |
|
|
| the year |
|
|
4,260,392 |
67,492 |
|
|
|
|
| Net
assets as at June 30, 2000 (1999) |
|
|
| Share capital |
|
|
150,000,000 |
150,000,000 |
|
| Accumulated
profit |
|
|
4,449,956 |
189,564 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
154,449,956 |
150,189,564 |
|
|
|
|
========== |
========== |
|
|
|
M. Habib-ur-Rahman |
|
|
Munaf Ibrahim |
|
|
Chief. Executive |
|
|
Director |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended June 30, 2000 |
|
|
|
|
|
|
2000 |
1999 |
|
|
|
|
|
| Cash
Flows from Operating Activities |
|
|
| Profit
before taxation |
|
|
50,293,542 |
14,542,005 |
|
| Adjustments
for: |
|
|
|
|
|
|
|
|
|
| (Reversal)/Provision
for diminution in value of |
|
|
|
|
| marketable
securities |
|
|
(711,379) |
(11,165,619) |
|
| Adjustment
for deferred expenditure payable |
|
|
(1,184,117) |
(1,184,115) |
|
| Operating
profit before working capital |
|
|
------------------ |
------------------ |
|
| changes |
|
|
48,398,046 |
2,192,271 |
|
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
|
|
| Marketable
securities |
|
|
15,021,521 |
(22,553,782) |
|
| Advance
against investment |
|
|
-- |
1,000,000 |
|
| Other
investments |
|
|
15,000,000 |
61,000,000 |
|
| Trade debts |
|
|
(61,705,590) |
(33,039,481) |
|
| Advances
and other receivables |
|
|
2,233,721 |
(2,078,251) |
|
|
|
|
| Increase/(decrease)
in current liabilities |
|
|
| Accounts
payable and accrued expenses |
|
(127,985) |
(10,171,387) |
|
| Due
to Investment Adviser |
|
3,426,800 |
(101,680) |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
22,246,513 |
(3,752,310) |
|
|
|
|
| Taxes
received/paid |
|
466,851 |
(110,001) |
|
| Dividend paid |
|
(14,995,856) |
(11,998,123) |
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from operating activities |
|
7,717,508 |
(15,860,434) |
|
|
|
|
| Net
increase/(decrease) in cash and bank |
|
|
|
|
| balances |
|
7,717,508 |
(15,860,434) |
|
|
|
|
|
|
| Cash
and bank balances at the beginning of |
|
|
|
|
| the year |
|
|
864,690 |
16,725,124 |
|
|
|
|
|
|
| Cash
and bank balances at the end of the |
|
|
------------------ |
------------------ |
|
| year |
|
Rupees |
8,582,198 |
864,690 |
|
|
|
|
========== |
========== |
|
|
|
M. Habib-ur-Rahman |
|
|
Munaf Ibrahim |
|
|
Chief Executive |
|
|
Director |
|
|
|
| Notes
to the Accounts |
|
| For
the year ended June 30, 2000 |
|
|
| 1.
Status and Nature of Business |
|
| The
Company was incorporated on March 26, 1994 as a public limited company under
the |
|
| Companies
Ordinance, 1984 and was registered as an investment company under the
Investment |
|
| Companies
and Investment Advisers Rules, 1971 on July 5, 1994. The Company obtained |
|
| certificate
of commencement of business on August 8, 1995 and is listed on the Karachi
Stock |
|
| Exchange.
The Company is a closed-end mutual fund. The Company has entered into an |
|
| agreement
with an associated company, ABAMCO Limited to act as its 'Investment Adviser'
and |
|
| Muslim
Commercial Bank Limited as its 'Custodian'. The principal activity of the
Company is to |
|
| make
investment in securities. |
|
|
|
|
| 2.
Significant Accounting Policies |
|
|
|
|
|
| 2.1
Accounting convention |
|
|
| The
accounts of the Company a |
