| Kasb Premier 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 |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
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| NOTES
TO THE ACCOUNTS |
|
| STATEMENT
OF INCOME AND EXPENDITURE |
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| IN
RELATION TO THE INVESTMENT COMPANY |
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| PATTERN
OF SHAREHOLDING |
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| COMPANY
INFORMATION |
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|
| Board
of Directors |
Ahmed Kamran, Chairman |
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|
Qazi Mazharul Haque,
Chief Executive |
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|
Javaid B. Sheikh |
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|
Akhtar Ali Khan |
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|
Rizwan Khalid Butt |
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|
Syed Abid Raza |
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|
Nadeem Naqvi |
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| Company
Secretary |
Zulfiqar Hyder Khan |
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| Investment
Adviser |
Khadim Ali Shah Bukhari
& Co. Ltd. |
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| Auditors |
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Taseer Hadi Khalid &
Co. |
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| Legal Adviser |
|
Mohsin Tayebaly & Co. |
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|
|
| Custodian |
|
Deutsche Bank A.G. |
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| Bankers |
|
Deutsche Bank A.G. |
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|
Metropolitan Bank Ltd. |
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| Registered
Office |
6th Floor, Trade Centre |
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|
I.I. Chundrigar Road |
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|
Karachi-74200, Pakistan |
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| Share
Department |
Ground Floor |
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|
Sheikh Sultan Trust
Building No. 2 |
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|
Beaumont Road |
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|
Karachi-75530, Pakistan |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Sixth Annual General Meeting of KASB Premier Fund
Ltd. will be held on |
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| Thursday,
November 02, 2000 at 12:00 noon at the Pearl Continental Hotel, Dr. Ziauddin
Ahmed Road, Karachi |
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| to
transact the following business:- |
|
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| 1.
To confirm the minutes of the Fifth Annual General Meeting of the Company
held on |
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| December
08, 1999. |
|
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| 2.
To receive, consider and adopt the audited accounts of the Company together
with the Directors' and |
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| Auditors'
report thereon for the year ended June 30, 2000. |
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| 3.
To appoint auditors of the Company for the year ending June 30, 2001 and to
fix their remuneration. |
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| The
present auditors, Messrs Taseer Hadi Khalid & Co., Chartered Accountants,
retire and being eligible, |
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| offer
themselves for reappointment. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
|
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| By
order of the Board |
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| Karachi: |
|
ZULFIQAR HYDER KHAN |
|
| September
14,2000 |
|
Company Secretary |
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| Notes: |
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| 1.
The share transfer books of the Company will remain closed from October
19,2000 to November 02,2000 |
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| (
both days inclusive ) to determine the names of the members entitled to
attend the meeting. |
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| 2.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend, speak and |
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| vote
for him/her. A proxy must be a member of the Company. |
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|
| 3.
Proxy forms in order to be effective must be received at the Company's
registered office, duly stamped |
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| and
signed not less than 48 hours before the meeting. |
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| 4.
Accountholders / sub-accountholders holding book entry securities of the
Company in Central Depository |
|
| System
(CDS) of Central Depository System of Pakistan Limited (CDC) who wish to
attend the Annual |
|
| General
Meeting are requested to please bring their original ID Card / original
passport with a photocopy |
|
| duly
attested by their bankers for identification purposes. In case of Corporate
entity, the Board of |
|
| Directors'
resolution / power of attorney with specimen signature of the nominee shall
be produced |
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| (unless
it has been provided earlier) at the time of the meeting. ' |
|
|
| 5.
Members are requested to notify any change in their registered addresses
immediately. |
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|
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Economic
Scenario |
|
|
| Pakistan's
economy is going through a major transition as the new technocratic team
under the present Government |
|
| endeavors
to reduce the historic imbalances and distortions that led to a significant
slowdown in average GDP |
|
| growth
in the nineties compared to the eighties. |
|
|
| External
account pressure, coupled with dwindling foreign exchange earnings and
declining foreign remittances, |
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| has
also continued to destabilize the country's financial position throughout the
year. Although the country has |
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| successfully
rescheduled its U.S.$3.3 billion short-term bilateral debt with the Paris
Club creditors, the position |
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| of
its external finance remains susceptible. The conflict with India over
Kashmir has also added to this saga by |
|
| further
dampening investor confidence, and continuing to deter foreign investment. |
|
|
| During
the year under review, however, the new government took initiatives on
several fronts. By sharply |
|
| lowering
interest rates, it has induced business and the industry to borrow more
liberally from the banking |
|
| system.
It has also launched micro and export credit initiatives and unveiled
progressive textile and information |
|
| technology
development policies geared towards encouraging export-based industries. The
re-launch of the |
|
| privatization
process with much more realistic sell off targets has been another positive
move. With documentation |
|
| of
the economy finally underway and the accountability and loan recovery drive,
"political" loans are no longer |
|
| possible. |
|
|
| The
documented segment is still too small a proportion of the economy to make a
large contribution to investment |
|
| activity.
As a result, the major growth impetus is only possible from the public
sector, which is likely to remain |
|
| subdued
in the short term as the government has to first put its own financial house
in order. As far as foreign |
|
| investment
is concerned, it normally follows domestic investment so that too is likely
to be limited in the short |
|
| term.
It is thus expected that foreign investment will wait for the green light
from the IMF program re-initiation, |
|
| which is
unlikely before the end of calendar year 2000. |
|
|
| The
Capital Market Scene |
|
|
| The
underlying economic realities are invariably reflected in the medium to
longer-term performance of capital |
|
| markets.
After showing dramatic improvement in the last quarter of calendar 1999 on
the back of a change in |
|
| government,
the equity market entered a phase of high speculative activity in 1 st
quarter of year 2000, which |
|
| took
the KSE-100 index to 2050 levels. Dawning of reality that economic change was
a slow process spanning |
|
| several
fiscal years, and also tightening of trading regulations to curb excessive
speculation, led to a major pull |
|
| back
in the market to just below 1400 levels in 2nd quarter of year 2000, from
which it is still recovering. |
|
|
| Operating
Results |
|
|
| Against
the lackluster backdrop of the economy, the company managed to earn a profit
after tax of Rs. 66mn |
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| for
the year under review, compared to Rs. 34mn in the previous year. Income of
Rs. 35mn was |
|
| generated
in Accounting Year ended June 30, 2000, compared to just Rs 1 mn last year,
representing a substantial |
|
| jump
of 97%. The income derived from capital gains managed to come out of the red
and was recorded at |
|
| Rs
18mn, mainly due to maximum advantage secured by the company from improved
stock market performance |
|
| and
strategic asset allocation. |
|
|
| The
Fund's total asset base and shareholders' equity have registered an increase
from Rs 254.97mn and |
|
| Rs
242.60mn in Accounting Year ended June 30, 1999 to Rs 314.67mn and Rs
309.34mn in Accounting Year |
|
| ended
June 30, 2000 respectively. The net asset value (NAV) has risen to Rs 7.73
per share this year as against |
|
| Rs
6.07 per share last year. Following the out performance of the KSE Index, the
Fund witnessed its NAV |
|
| peaking
at 9.23 per share in April 2000. However, the consequent heavy downslide in
KSE index in the 2nd |
|
| half
of year 2000 due to crisis in the stock market dried up investor interest.
This was aptly reflected by the |
|
| Funds
NAV, being brought down to 7.73 per share as at June 30, 2000. The NAV as at
September 11, 2000 was |
|
| Rs.
8.23 per share. |
|
|
| While
we are hopeful of improving upon these results in the coming year, we realize
that falling volumes due |
|
| to
reduced market activity and limited foreign fund interest are likely to weigh
heavily on the income generating |
|
| capacity
of mutual funds in Pakistan. The Fund is, nevertheless, striving to align
itself to the new realities and |
|
| has
embarked upon several new strategic initiatives. Changes in the internal
organization, with experienced |
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| professional
managers inducted to lead the company towards a dynamic future, along with
product and service |
|
| innovation,
are expected to consistently yield high returns to the Fund. |
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|
| Future
Outlook |
|
|
|
| In
view of the above, the Directors expect private sector driven industrial
activity to remain relatively weak in |
|
| Financial
Year 2000-2001, until confidence can be sufficiently restored to induce new
investment on a significant |
|
| scale.
We believe that private sector investment will pick up in Financial Year
2001-2002 once Pakistan is into |
|
| the
IMF program and progress is achieved on the issue of second external debt
restructuring. In the meantime, |
|
| agricultural
growth is expected to lead the way. |
|
|
| Going
forward, the performance of equities will hinge on macro level developments,
such as the IMF facility |
|
| and
external debt rescheduling - the two determining the broad country risk
premium, as well as corporate |
|
| fundamentals
such as earnings growth outlook, return on capital employed and specific
sector risks and |
|
| opportunities.
In this regard we are cautiously optimistic, and feel that after a volatile
Financial Year 1999-2000, |
|
| we
are likely to see a more stable and at the same time improved market
performance in Financial Year |
|
| 2000-2001.
While trading interest and consequently, volumes dried up in the aftermath of
the stock market crisis, |
|
| we
feel that confidence will be restored gradually as impending issues relating
to IMF financing and external |
|
| debt
rescheduling get resolved and improved corporate earnings begin to get
discounted into the equity market |
|
| in
the next fiscal year. |
|
|
| Auditors |
|
|
| The
members are requested to appoint auditors for 2000-2001 and fix their
remuneration. The present Auditors |
|
| Taseer
Hadi Khalid & Co., Chartered Accountants, retire and offer themselves for
re-appointment. |
|
|
| The
Board wishes to record its appreciation for the service rendered by the
outgoing director, Mr. Liaquat Ali |
|
| and
extends its warm welcome to the new member viz Mr. Nadeem Naqvi. It also
places on record its recognition |
|
| of
the valuable contribution made by the Boards' Executive Committee. |
|
|
| Pattern
of Shareholding |
|
|
| The
pattern of shareholding as required by section 236 of the Companies
Ordinance, 1984 is enclosed. |
|
|
|
On behalf of the Board of
Directors |
|
|
| Karachi: |
|
QAZI MAZHARUL HAQUE |
|
| September
14, 2000 |
|
Chief Executive |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of KASB Premier Fund Limited as at 30
June |
|
| 2000
and the related Profit and Loss Account and Cash Flow Statement, together
with the notes |
|
| to
the accounts 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 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 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 the |
|
| 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 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
explanations given |
|
| to
us, the Balance Sheet and the Profit and Loss Account and the Cash Flow
Statement |
|
| together
with the notes forming part thereof give the information required by the |
|
| Companies
Ordinance, 1984 and 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 30 June 2000 and of the profit and cash flows
for the |
|
| year
ended on that date; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980; |
|
|
| Karachi: |
|
Taseer Hadi Khalid &
Co. |
|
| 14
September 2000 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
| ASSETS |
|
|
| Marketable
Securities - net |
|
3 |
261,798 |
162,904 |
|
| Deferred
Expenditure |
|
|
-- |
1,487 |
|
| Other Assets |
|
|
|
|
| Deposit
and other receivables |
|
4 |
2,484 |
3,914 |
|
| Taxation |
|
1,473 |
1,360 |
|
| Bank
balances - on deposit account |
|
48,912 |
85,109 |
|
|
----------- |
----------- |
|
|
52,869 |
90,583 |
|
|
----------- |
----------- |
|
| Total Assets |
|
314,667 |
254,974 |
|
|
| LIABILITIES |
|
|
| Current
Liabilities |
|
| Current
maturity of deferred expenditure payable |
|
-- |
3,060 |
|
| Due
to the Investment Adviser |
|
5 |
4,529 |
2,623 |
|
| Creditors
and accrued expenses |
|
6 |
802 |
6,696 |
|
|
----------- |
----------- |
|
| Total
Liabilities |
|
5,331 |
12,379 |
|
|
----------- |
----------- |
|
| NET ASSETS |
|
309,336 |
242,595 |
|
|
========== |
========== |
|
|
|
|
| SHAREHOLDERS'
EQUITY |
|
|
|
| Authorised
capital |
|
|
|
| 80,000,000
ordinary shares of Rs. 10 each |
|
800,000 |
800,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
| 40,000,000
ordinary shares of Rs. 10 each |
|
| issued
as fully paid in cash |
|
400,000 |
400,000 |
|
|
| Accumulated
loss |
|
12 |
(90,664) |
(157,405) |
|
|
|
----------- |
----------- |
|
|
309,336 |
242,595 |
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
QAZI MAZHARUL HAQUE |
|
JAVAID & SHEIKH |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
| Income |
|
|
| Capital
gain / (loss) on marketable securities |
|
17,794 |
(13,924) |
|
| Dividend
income |
|
11,789 |
11,892 |
|
| Profit
on term finance certificates |
|
3,096 |
1,741 |
|
| Profit
on bank deposits |
|
2,368 |
1,322 |
|
|
----------- |
----------- |
|
|
35,047 |
1,031 |
|
|
| Operating
Expenses |
|
|
| Administrative |
|
7 |
(2,654) |
(3,282) |
|
| Financial |
|
8 |
(42) |
(271 ) |
|
| Remuneration
to the Investment Adviser |
|
5.1 |
(4,500) |
(2,356) |
|
|
|
----------- |
----------- |
|
|
(7,196) |
(5,909) |
|
|
----------- |
----------- |
|
|
27,851 |
(4,878) |
|
|
| Reversal
of diminution in value of |
|
| marketable
securities |
|
3 |
39,479 |
38,934 |
|
|
----------- |
----------- |
|
| Profit
before taxation |
|
67,330 |
34,056 |
|
|
| Taxation-Current |
|
(589) |
(595) |
|
|
----------- |
----------- |
|
| Profit
for the year |
|
66,741 |
33,461 |
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
QAZI MAZHARUL HAQUE |
|
JAVAID & SHEIKH |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
2000 |
1999 |
|
|
(Rupees in
thousand) |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
67,330 |
34,056 |
|
|
| Adjustments
for non-cash charges: |
|
| Amortisation
of deferred expenditure |
|
1,488 |
1,488 |
|
| Reversal
of diminution in value of marketable securities |
|
(39,479) |
(38,934) |
|
|
---------- |
---------- |
|
|
(37,991) |
(37,446) |
|
|
---------- |
---------- |
|
| Operating
profit / (loss) before working capital changes |
|
29,339 |
(3,390) |
|
|
| (Increase)
/decrease in current assets: |
|
| Marketable
securities |
|
(59,416) |
75,259 |
|
| Trade debts |
|
-- |
5,850 |
|
| Deposit
and other receivables |
|
1,430 |
1,142 |
|
|
---------- |
---------- |
|
|
(57,986) |
82,251 |
|
|
| Increase
/ (decrease) in current liabilities: |
|
| Due
to the Investment adviser |
|
1,906 |
1,266 |
|
| Creditors
and accrued expenses |
|
(5,894) |
5,980 |
|
|
---------- |
---------- |
|
|
(3,988) |
7,246 |
|
|
---------- |
---------- |
|
| Cash
(used in) / generated from operations |
|
(32,635) |
86,107 |
|
| Income
tax paid |
|
(502) |
(998) |
|
|
---------- |
---------- |
|
| Net
cash flows from operating activities |
|
(33,137) |
85,109 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Deferred
expenditure paid |
|
(3,060) |
(3,060) |
|
|
---------- |
---------- |
|
| Net
cash flows from financing activities |
|
(3,060) |
(3,060) |
|
|
---------- |
---------- |
|
| (Decrease)
! increase in bank balances |
|
(36,197) |
82,049 |
|
| Bank
balances at beginning of the year |
|
85,109 |
3,060 |
|
|
---------- |
---------- |
|
| Bank
balances at end of the year |
|
48,912 |
85,109 |
|
|
========== |
========== |
|
|
|
QAZI MAZHARUL HAQUE |
|
JAVAID & SHEIKH |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO AND FORMING PART OF THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
|
| KASB
Premier Fund Ltd. is a public limited company incorporated on December 11,
1994 under the |
|
| Companies
Ordinance, 1984 and has been registered with the Corporate Law Authority as
an Investment |
|
| Company
under the Investment Companies and Investment Adviser' s Rules, 1971 to carry
on the business |
|
| of
a closed end investment company. The company has entered into an agreement
with Khadim Ali Shah |
|
| Bukhari
& Co. Ltd. to act as its "Investment Adviser". The company
commenced its business on July 11, |
|
| 1995
and is listed on all Stock Exchanges in Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Statement of compliance |
|
|
| These
accounts have been prepared in accordance with Accounting Standards, issued
by the International |
|
| Accounting
Standards Committee (IASC), interpretations issued by the Standing
Interpretations |
|
| Committee
(SIC) of the IASC and the requirements of the Investment Companies and
Investment |
|
| Adviser's
Rules, 1971. |
|
|
| 2.3
Deferred expenditure |
|
|
| Expenditure
incurred on the incorporation and on the issue of shares of the company to
the public, |
|
| borne
by Investment Adviser, Khadim Ali Shah Bukhari & Co. Ltd., has been
deferred and is being |
|
| amortised
over a period of five years from the date of commencement of business. |
|
|
| 2.4
Marketable securities |
|
|
| Investments
in quoted securities are valued at lower of cost and market value. Cost is
determined on |
|
| moving
average basis and market value is determined on an aggregate portfolio basis.
Middle market |
|
| price
has been used for calculating market value and it means the average of the
highest and the lowest |
|
| quotation
prevailing on the balance sheet date. |
|
|
| 2.5
Revenue recognition |
|
|
| (i)
Sales and purchases of securities are recognised on the date of contract.
Capital gains and losses |
|
| on
sale of securities are taken to income in the year in which it arises. |
|
|
| (ii)
Dividend income is recorded at the time of the closure of share transfer book
of the company |
|
| declaring
the dividend. |
|
|
| (iii)
Income on term finance certificates is recorded on time proportion basis
taking into account the |
|
| principal
outstanding and the yield applicable. |
|
|
| 2.6 Taxation |
|
|
| The
charge for current taxation is based on taxable income at the current rate of
taxation. The company |
|
| provides
for deferred tax liability under the liability method. |
|
|
| 3.
MARKETABLE SECURITIES |
|
| These
securities are ordinary fully paid shares/certificates of Rs. 10 each unless
stated other, vise. |
|
|
|
|
| NAME
OF COMPANIES |
|
NUMBER OF
SHARES/CERTIFICATES |
|
BALANCE AS AT JUNE 30,
2000 |
PERCENTAGE IN RELATION TO |
|
Opening |
Purchases |
Bonus |
Sales |
No. of shares/ |
At cost |
At market |
Own net |
Paid-up capital |
Total cost of |
|
|
certificates |
|
assets |
of investee |
investment |
|
|
(Rupees in thousand) |
|
(with cost of |
company |
|
|
|
investment) |
(with face value |
|
|
|
of investment) |
|
|
| MUTUAL
FUNDS |
|
| ICP-SEMF |
|
-- |
50,000 |
-- |
50,000 |
-- |
-- |
-- |
-- |
-- |
-- |
|
|
|
|
|
|
| INVESTMENT
COMPANIES |
|
| AND BANKS |
|
| AI-Faysal
Investment Bank Ltd. |
798,250 |
-- |
-- |
197,000 |
601,250 |
15,119 |
6,463 |
4.89 |
0.61 |
3.82 |
| Askari
Commercial Bank Ltd. |
|
-- |
1,232,500 |
-- |
162,500 |
|
1,070,000 15,716 |
14,852 |
5.08 |
1.08 |
3.97 |
| Bankers
Equity Ltd. |
|
40,000 |
-- |
-- |
40,000 |
-- |
-- |
-- |
-- |
-- |
-- |
| Bank
of Punjab Ltd. |
|
-- |
11,700,000 |
-- |
11,700,000 |
-- |
-- |
-- |
-- |
-- |
-- |
| Crescent
Investment Bank Ltd. |
245,700 |
135,700 |
-- |
280,700 |
100,700 |
2,350 |
1,483 |
0.76 |
0.20 |
0.59 |
| Faysal
Bank Ltd. |
|
250 |
-- |
-- |
250 |
-- |
-- |
-- |
-- |
-- |
-- |
| Muslim
Commercial Bank Ltd. |
|
-- |
1,898,000 |
-- |
1,868,000 |
30,000 |
1,046 |
934 |
0.34 |
0.02 |
0.26 |
| Trust
Investment Bank Ltd. |
|
1,000,000 |
-- |
-- |
-- |
1,000,000 |
10,397 |
10,230 |
3.36 |
10.00 |
2.63 |
| Union
Bank Ltd. |
|
3,500 |
-- |
-- |
3,500 |
-- |
-- |
-- |
|
|
|
| INSURANCE |
|
|
| Adamjee
Insurance Go Ltd. |
|
-- |
5,095,500 |
-- |
5,095,500 |
-- |
-- |
-- |
-- |
-- |
-- |
