| Asian Stocks Fund Limited |
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| Annual
Report 1999 |
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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 |
|
| PATTERN
OF HOLDING OF THE SHARES |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
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| NOTES
TO THE ACCOUNTS |
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| STATEMENT
OF INCOME & EXPENDITURE IN RELATION TO THE |
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| INVESTMENT
COMPANY |
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| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Zaigham Mehmood Rizvi |
|
| Mr.
Farooq Ismail |
|
| Mohammad
Ali Yacoob |
|
| Mr.
Bashir Blkasm Omer |
|
| Mr.
Ramadan A. Haggiagi |
|
| Ms.
Aaliya K. Dossa |
|
| Mr.
Noman Ahmed Qureshi |
|
|
| CHIEF
EXECUTIVE |
|
| Mohammad
Ali Yacoob |
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|
| COMPANY
SECRETARY |
|
| Mr.
Abdul Hafiz Khan |
|
|
| MANAGEMENT
COMPANY |
|
| Asian
Capital Management (Pvt.) Limited |
|
|
| BANKERS |
|
| Union
Bank Limited. |
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| Muslim
Commercial Bank Ltd. |
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| National
Bank of Pakistan |
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|
| AUDITORS |
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| M.
Yousuf Adil Saleem & Co. |
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| Chartered
Accountants. |
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| LEGAL
ADVISERS |
|
| Mohsin
Tayebaly & Co. |
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| REGISTERED
OFFICE |
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| 5th
Floor, Block "C" |
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| Finance
& Trade Centre, |
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| Shara-e-Faisal |
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| Karachi. |
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|
| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 5th Annual General Meeting of ASIAN STOCKS FUND
LIMITED will be held on |
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| December
17, 1999 at 3 p.m. at Raffia Chaudhry Memorial Centre, Sidco Avenue Centre,
264 R.A. Lines, Karachi, |
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| to
transact the following business:- |
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|
| 1.
To confirm the Minutes of the last Annual General Meeting of the Company held
on December 26, 1998. |
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|
|
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| 2.
To receive, consider and adopt the audited accounts of the Company together
with the Directors' report thereon |
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| for
the period ended June 30, 1999. |
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| 3.
To appoint Auditors of the Company and to fix their remuneration. The present
Auditors M/s. YOUSUF ADIL |
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| SALEEM
& COMPANY, CHARTERED ACCOUNTANTS, retire and being eligible, offer
themselves for re- |
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| appointment. |
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|
| SPECIAL
BUSINESS |
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| 4.
To approve the change of Custodian |
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|
By order of the Board |
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| Karachi:
November 06, 1999. |
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SECRETARY |
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| NOTES: |
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| 1.
A member entitled to attend and vote at the meeting may appoint a proxy to
attend and vote instead of him/her |
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| at
the meeting. Proxies must be deposited at the Company's Registered Office not
less than 48 hours before the |
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| time
for holding the meeting. A proxy must be a Member. |
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|
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| 2.
The share transfer books of the Company shall remain closed from December 15,
1999 to December 21, 1999 |
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| (both
days inclusive). |
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| 3.
Shareholders are advised to notify of any change in their addresses. |
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| Statement
in respect of special business and related draft Resolution |
|
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| Material
facts concerning the Special Business to be transacted at the Annual General
Meeting and the proposed |
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| Resolution
related thereto are given below. |
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| To
obtain share holder's approval for the change of Custodian and it is proposed
to pass the following resolution. |
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|
| "Resolved
that subject to the approval of Securities and Exchange Commission of
Pakistan the Chief Executive is |
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| authorized
to enter into a Custodian agreement with Muslim Commercial Bank Limited,
which will replace Union |
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| Bank
Limited, as a Custodian of the Asian Stocks Fund Limited. |
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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 for the |
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| year
ended June 30, 1999. |
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|
| Operations
Preview |
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| During
the period under review the economic and political conditions in the country
remained volatile due to various |
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| factors
including the political and economic pressures on Pakistan in the post Nuke
scenario. In May 1999, the |
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| country
faced another crisis due to Kargil issue and border hostilities. The
Government and Independent Power |
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| Producers
(IPPs) remained logger headed on the tariff issue and could not resolve their
differences. The reflection of |
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| these
adverse factors can be judged by glancing at the performance of KSE. Both
local and foreign investors were |
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| reluctant
to enter into the market, on long-term basis, and the market capitalization
during the period under review |
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| fluctuated
within the range of Rs. 269 - 288 Billion. In terms of US dollars the market
capitalization oscillated |
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| between
$ 5.68-5.71 Billion during the reference period. |
|
|
| Comparison
of portfolio performance viz, a viz. KSE 100 index and NIT |
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| During
the period under review the performance of the Fund was better than its
previous years. As you are aware that |
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| during
the last four years period the Net Asset Value (NAV) of your Fund was
continuously decreasing and, as on |
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| June
30, 1998. it came down to Rs. 3.72. By the Grace of Allah, your company
managed to reverse the previous |
|
| trends
and the NAV, as on June 30, 1999, has increase to Rs. 4.02, showing an
increase of 9%. |
|
|
| During
this period the KSE -100 index rose from 879 to 1055, showing an increase of
20%. In case of National |
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| Investment
Trust (NIT), the largest open-end mutual fund of the country in the public
sector, and having a market ~: |
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| capitalization
of around 80% of the mutual fund sector, its per unit price also increased
from Rs. 7.95, from June 30, |
|
| 1998
to June 30, 1999 respectively, thus showing an increase of 12.75%. |
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|
| Future Outlook |
|
|
| The
Management company of Asian Stocks Fund Limited was acquired by the
consortium led by Pak-Libya Hold- |
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| ing
Co. (Pvt.) Limited with effect from January 1, 1999. This may be noted that
the NAV of the Fund, at the time of |
|
| acquisition,
was Rs. 3.72 only and its accumulated losses were around Rs. 63 million. The
new management has |
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| taken
the challenge with the objective to reverse this process and devised a
business strategy to re-structure the |
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| investment
portfolio through efficient management of capital market operations. During
the last six months the new |
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| management
has successfully reduced the previous losses of the company and the NAV of
your company has en- |
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| hanced
from Rs. 3.72 to Rs. 4.02. The investment advisers also took a bold
initiative of restructuring the portfolio by |
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| disposing
illiquid and less promising scrips and replacing them with liquid and
promising scrips. That made man- |
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| agement
and operations of the fund more flexible as well as NAV became more
realistic. The present portfolio of the |
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| Fund
is comprised of more liquid securities and with promising intrinsic value. |
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| We
are confident that our company is progressing in the right direction and we
will, Insha Allah, succeed in making |
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| your
company as one of the financially strong companies of the sector. |
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|
| PATTERN
OF HOLDING OF SHARES: |
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|
| The
pattern of holding of shares as required by section 236 of the Companies
Ordinance 1984 is attached with the |
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| report. |
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| AUDITORS: |
|
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| The
present Auditors M/s. Yousuf Adil Saleem & Co., Chartered Accountants are
due for retirement and being |
|
| eligible,
offer themselves for re-appointment for the financing year 1999-2000. |
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|
For and behalf of the Board |
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| Karachi,
6th November 1999. |
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|
Chairman |
|
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| PATTERN
OF SHAREHOLDING |
|
| FORM "34" |
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| SHAREHOLDERS
STATISTICS |
|
| As
at June 30, 1999 |
|
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| Number |
|
Share |
|
Total |
|
| of |
From |
Holding |
To |
Shares |
|
| Shareholders |
|
|
|
Held |
|
|
| 1992 |
101 |
-- |
500 |
996,000 |
|
| 69 |
501 |
-- |
1000 |
69,000 |
|
| 59 |
1001 |
-- |
5000 |
184,500 |
|
| 11 |
5001 |
-- |
10000 |
96,000 |
|
| 1 |
10001 |
-- |
15000 |
15,000 |
|
| 5 |
15001 |
-- |
20000 |
95,500 |
|
| 2 |
20001 |
-- |
25000 |
50,000 |
|
| 7 |
25001 |
-- |
30000 |
206,500 |
|
| 18 |
35001 |
-- |
40000 |
718,000 |
|
| 4 |
45001 |
-- |
50000 |
200,000 |
|
| 1 |
135001 |
-- |
140000 |
135,500 |
|
| 1 |
195001 |
-- |
200000 |
200,000 |
|
| 3 |
245001 |
-- |
250000 |
750,000 |
|
| 2 |
435001 |
-- |
440000 |
871,000 |
|
| 1 |
585001 |
-- |
590000 |
585,500 |
|
| 1 |
695001 |
-- |
700000 |
700,000 |
|
| 1 |
995001 |
-- |
1000000 |
1,000,000 |
|
| 1 |
1195001 |
-- |
1200000 |
1,200,000 |
|
| 1 |
1925001 |
-- |
1930000 |
1,927,500 |
|
| ------------------ |
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|
------------------ |
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| 2180 |
|
10,000,000 |
|
| ========== |
|
========== |
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|
CATEGORIES |
|
NUMBER |
TOTAL |
|
|
| S. NO. |
OF |
|
OF SHARE |
SHARES |
PERCENTAGE |
|
|
SHAREHOLDERS |
HOLDERS |
HELD |
|
|
|
| 1. |
INDIVIDUALS |
|
2168 |
2,630,500 |
26.31 |
|
| 2. |
INVESTMENT COMPANIES |
8 |
5,284,000 |
52.84 |
|
| 3. |
JOINT STOCK COMPANY |
1 |
1,000,000 |
10.00 |
|
| 4. |
FINANCIAL INSTITUTIONS |
2 |
950,000 |
9.50 |
|
| 5. |
MODARABA COMPANY |
1 |
135,500 |
1.35 |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
2180 |
10,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
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|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ASIAN STOCKS FUND LIMITED as at
June 30, 1999 and the |
|
| related
profit and loss account and statement of changes in financial position (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
to the best of our knowledge and belief were necessary for the purposes of
our audit and, after due verification |
|
| thereof,
we report |
|
|
| a.
in our opinion, proper books of account have been kept by the Company as
required by the Companies Ordi- |
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| nance,
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 |
|
| Rule,
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 accor- |
|
| dance
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 and the statement of changes in financial position
(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 Rule, 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, 1999 and
of the profit and the changes in |
|
| financial
position for the year then ended; and |
|
|
| d.
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
| Karachi,
6th November 1999. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| As
At June 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| ASSETS |
|
|
|
|
|
|
| Deferred
expenditure |
|
3 |
337,561 |
1,147,701 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Marketable
equity securities |
|
4 |
31,278,429 |
23,945,877 |
|
| Advance
income tax |
|
|
970,005 |
817,846 |
|
| Dividend/Profit
receivable -considered good |
|
|
1,126,450 |
48,019 |
|
| Bank balances |
|
|
|
| In
current account |
|
|
12,947 |
46,862 |
|
| In
special deposit accounts |
|
|
10,130,794 |
15,389,007 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
43,518,625 |
402,471,611 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
|
43,856,186 |
41,395,312 |
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of deferred expenditure payable |
|
|
1,147,701 |
810,140 |
|
| Due
to investment advisor |
|
5 |
918,664 |
942,796 |
|
| Accrued
expense |
|
|
30,000 |
30,000 |
|
| Provision
for taxation |
|
|
1,565,108 |
1,114,089 |
|
|
|
|
------------------ |
------------------ |
|
| OTHER
LIABILITIES |
|
|
3,661,473 |
2,897,025 |
|
| Deferred
expenditure payable |
|
6 |
-- |
1,147,701 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
LIABILITIES |
|
|
(3,661,473) |
(4,044,726) |
|
|
|
|
|
------------------ |
------------------ |
|
| NET ASSETS |
|
|
|
40,194,713 |
37,350,586 |
|
|
|
|
|
========== |
========== |
|
| SHAREHOLDERS
EQUITY |
|
7 |
40,194,713 |
37,350,586 |
|
|
|
|
|
========== |
========== |
|
| CONTINGENCIES |
|
8 |
|
|
|
|
|
|
|
|
|
| The
annexed notes from 1 to 16 form an integral part of these accounts |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| For
the year ended June 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
| Income |
|
|
|
| Dividend
income - net of zakat |
|
|
|
5,468,937 |
4,728,578 |
|
|
| Return
on bank deposits |
|
|
|
521,597 |
125,704 |
|
|
| Capital
loss on marketable securities |
|
|
9 |
(12,906,094) |
(34,105,929) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(6,915,560) |
(29,251,647) |
|
|
|
|
| Operating
expenses |
|
|
|
| Remuneration
to Investment Advisor |
|
5.1 |
803,894 |
747,012 |
|
| Custodian
charges |
|
|
133,395 |
270,161 |
|
| Amortization
of deferred expenditure |
|
|
810,140 |
810,140 |
|
| Listing fee |
|
|
92,500 |
92,500 |
|
| Audit fee |
|
|
30,000 |
30,000 |
|
| Interest
on deferred expenditure |
|
|
114,770 |
195,784 |
|
| Bank charges |
|
|
1,620 |
2,036 |
|
| Others |
|
|
9,951 |
7,328 |
|
|
|
|
------------------ |
------------------ |
|
|
|
(1,996,270) |
(2,154,961) |
|
|
|
------------------ |
------------------ |
|
| Loss
for the year |
|
(8,911,830) |
(31,406,608) |
|
|
|
|
| Reversal/(Provision)
of diminution in value of marketable securities |
|
12,206,976 |
(6,869,100) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
/ (Loss) before taxation |
|
|
3,295,146 |
(38,275,708) |
|
| Provision
for taxation |
|
|
|
| Current year |
|
|
10 |
(451,019) |
(285,592 ) |
|
|
|
|
|
------------------ |
------------------ |
|
| Profit
/ (Loss) after taxation |
|
|
(2,844,127) |
(38,561,300) |
|
| Accumulated
loss brought forward |
|
|
(62,649,414) |
(24,088,114) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
10ss carried forward |
|
|
(59,805,287) |
(62,649,414) |
|
|
|
|
========== |
========== |
|
| Earning
per share |
|
11 |
0.28 |
(3.86) |
|
|
|
|
|
|
|
|
|
|
|
| The
annexed notes from 1 to 16 form an integral part of these accounts |
|
|
|
CHIEF EXECUTIVE |
|
|
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| For
The Year Ended June 30, 1999 |
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
/ (Loss) before taxation |
|
|
3,295,146 |
(38,275,708) |
|
| Adjustments
for:- |
|
|
|
|
| Amortization
of deferred expenditure |
|
|
810,140 |
810,140 |
|
| (Reversal)
/ Provision for diminution in value of |
|
|
|
| marketable
securities |
|
(12,206,976) |
6,869,100 |
|
| Interest
on deferred expenditure |
|
|
114,770 |
195,784 |
|
|
|
------------------ |
------------------ |
|
|
|
(11,282,066) |
7,875,024 |
|
|
|
------------------ |
------------------ |
|
| Operating
loss before working capital changes |
|
(7,986,920) |
(30,400,684) |
|
|
|
|
|
| Effect
on cash flow due to working capital changes |
|
|
| (Increase)/decrease
in current assets |
|
|
|
| Marketable
securities |
|
4,874,424 |
29,865,677 |
|
| Accounts
receivable |
|
|
|
-- |
3,584,900 |
|
| Dividend
/ Profit receivable |
|
(1,078,431) |
202,922 |
|
|
|
------------------ |
------------------ |
|
|
|
3,795,993 |
33,653,499 |
|
| Increase/(decrease)
in current liabilities |
|
|
| Due
to Investment Adviser |
|
803,894 |
747,012 |
|
| Accured
expense |
|
-- |
5,000 |
|
|
|
------------------ |
------------------ |
|
|
|
803,894 |
752,012 |
|
|
|
------------------ |
------------------ |
|
| Cash(used
in) / generated from operations |
|
(3,387,033) |
4,004,827 |
|
| Paid
to investment adviser |
|
(942,796) |
(1,737,672) |
|
| Taxes paid |
|
(152,159) |
(12,572) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / from operating activities |
|
(4,481,988) |
2,254,583 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
|
| B.
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
| Deferred
liability repaid |
|
|
(810,140) |
(810,140) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
|
(810,140) |
(810,140) |
|
|
|
|
| Net
(decrease) / increase in cash and cash equivalents |
|
(5,292,128) |
1,444,443 |
|
| Cash
and bank balance at the beginning of the year |
|
15,435,869 |
13,991,426 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the end of the year |
|
10,143,741 |
15,435,869 |
|
|
|
|
========== |
========== |
|
|
|
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| For
The Year Ended June 30, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| 1.1
The Company was incorporated on June 13, 1994, as a public company limited by
shares under the Compa- |
|
| nies
Ordinance 1984 and was registered as an investment company under the
Investment Companies and |
|
| Investment
Adviser's Rules, 1971. The Company is listed on Karachi, Lahore and Islamabad
Stock Ex- |
|
| changes. |
|
|
| 1.2
It is a closed end mutual fund with an object to invest its assets in
securities. |
|
|
| 1.3.
Asian Capital Management (Pvt.) Limited are the approved Investment Adviser
and Union Bank Limited |
|
| are
the approved custodian of the Company. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Deferred expenditure |
|
| These
are amortized over a maximum period of five years from the year of deferment. |
|
|
| 2.3 Taxation |
|
|
| The
charge for current taxation is based on taxable income at the current tax
rates after taking into account |
|
| tax
credits and rebates available, if any. |
|
|
| 2.4
Marketable securities |
|
| These
are valued at lower of moving average cost and market value on an aggregate
portfolio basis. |
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|
| 2.5
Revenue recognition |
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| Sale
and purchase of securities are recorded on the date of the execution of
contract. Capital gains and losses |
|
| on
the sale of securities are accounted for in the year in which they arise. |
|
|
| Dividend
income is recognized at the time of closure of 'share transfer books' of the
company declaring |
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| dividend
and is recorded net of Zakat deducted. |
|
|
|
|
| Return
on bank deposits is recognized on accrual basis. |
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| 3.
DEFERRED EXPENDITURE |
|
|
|
| Preliminary
expenses |
|
|
621,642 |
621,642 |
|
| Share
issue expenses |
|
|
3,429,061 |
3,429,061 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
4,050,703 |
4,050,703 |
|
| Amortization |
|
|
|
|
|
| Upto last year |
|
|
|
2,903,002 |
2,092,862 |
|
| During the year |
|
|
|
810,140 |
810,140 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
(3,713,142) |
(2,903,002) |
|
|
|
------------------ |
------------------ |
|
| </ |
