| Safeway Mutual Fund Limited |
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| Company
Information |
|
|
| Board
of Directors |
|
|
| - Mr. Khalil Ahmed |
Chairman |
|
| - Mr. Naseer Ahmed |
Chief Executive |
|
| - Mr. M. Ismail Mughal |
|
| - Mr. M. H. Kausar |
|
| - Mr. K. G. Rabbani |
|
| - Mr. A. Fahim Khan |
|
| - Mrs. Shaheen Khalil |
|
|
| Company
Secretary |
|
| -
Mr. M. H. Kausar |
|
|
| Auditors |
|
| - Ilyas Saeed & Company |
|
| Chartered
Accountants |
|
|
| Investment
Advisors |
|
| -
Safeway Fund Limited |
|
|
| Registered
Office |
|
| Safeway
House, 1st Floor, Plot 28-E, |
|
| South
Park Avenue, Phase-II Ext., |
|
| DHA, Karachi |
|
|
| Phone:
5803116-8, 547057 |
|
| Fax: 5803115 |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the 5th Annual General Meeting of the |
|
| company
will be held on Friday, 13ecernber 24, 1999 at 09:00 AM at |
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| Safeway
House, 1st Floor, Plot 28-E, South Park Avenue, Phase-II |
|
| Extension,
DHA, Karachi to transact the following business: |
|
|
| Agenda
of the Meeting |
|
|
| 1.
To confirm the minutes of fourth Annual General Meeting held on |
|
| December
26, 1998. |
|
|
|
|
|
|
| 2.
To receive, consider and adopt Audited Accounts and Balance |
|
| Sheet
together with Directors' and Auditor's report thereon for the |
|
| year
ended June 30, 1999. |
|
|
|
|
|
|
| 3.
To appoint Auditors and fix their remuneration for the next year. |
|
|
|
|
| 4.
To transact any other business as may be placed before the |
|
| meeting
with permission of the Chairman. |
|
|
|
|
|
By orders of the Board |
|
|
|
|
|
|
| Karachi |
|
|
M. H. Kausar |
|
| November
29, 1999 |
|
Company Secretary |
|
|
| Note: |
|
| The
sham transfer books of the Mutual Fund will remain closed from December |
|
| 24,
1999 to December 31, 1999 (both days inclusive). |
|
|
|
| Directors'
Report to the Shareholders |
|
|
| The
Directors have pleasure in placing their report and audited accounts |
|
| for
the year ended June 30, 1999. |
|
|
| This
period has been a very difficult for the stock markets in Pakistan. |
|
| Generally
the investment climate was very badly shaken due to the |
|
| political
developments within the country. Your Directors are of the view |
|
| that
the investment climate is going to remain directionless unless some |
|
| structural
changes are implemented to encourage investment and uplift |
|
| the economy. |
|
|
| Your
Directors have decided to write down the portfolio value of Rs. |
|
| 870,509
during the year, thereby showing a total loss of Rs. 22,084,911 |
|
| from,
inception to-date. |
|
|
| The
Directors would like to place on record their appreciation for the |
|
| valuable
guidance and cooperation received from Safeway Fund Limited, |
|
| the
management company. |
|
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
|
|
|
Naseer Ahmed |
|
| November
29, 1999 |
|
Chief Executive |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of Safeway Mutual Fund |
|
| Limited
as at June 30, 1999 and the related Profit and Loss Account and |
|
| Statement
of Changes in Financial Position, together with the notes forming |
|
| part
thereof for the year 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 purpose of audit and, after due verification thereof, we |
|
| report that: |
|
|
| A.
In our opinion, proper books of accounts have been kept by the |
|
| company
as required by the Companies Ordinance, 1984 and the |
|
| Investment
Advisers Rule 1971. |
|
|
|
|
|
| B.
In our opinion: |
|
|
|
|
| 1.
The Balance Sheet and Profit & Loss Account together with |
|
|
| the
notes there on have been drawn up in conformity with |
|
|
| the
Companies ordinance, 1984, and are in agreement with |
|
|
| the
books of accounts and are further in accordance with |
|
|
| accounting
policies consistently applied. |
|
|
|
| 2.
The expenditure incurred during the period was for the |
|
| purpose
of the company's business; and |
|
|
|
|
|
| 3.
The business conducted, investment made and the |
|
| expenditure
incurred during the period were in accordance |
|
| with
the object 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 & loss Account |
|
|
| and
the Statement of Sources & Applications of Funds together with |
|
|
| the
notes forming part thereof, give the information required by the |
|
|
| Companies
Ordinance, 1984 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 loss and changes in financial |
|
|
| position
for the year then ended; and, |
|
|
|
|
| D.
In our opinion Zakat Deductible at source under the Zakat and Ushr |
|
| Ordinance,
1980 was deducted by the company and deposited in the |
|
|
| Central
Zakat Fund established under section 7 of that ordinance. |
|
|
|
| Karachi |
|
|
Ilyas Saeed & Co. |
|
| Dated
07-07-1999 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as on June 30, 1999 |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rs. |
Rs. |
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
| Preliminary
Expenses |
|
|
1,550,647 |
898,808 |
|
| INVESTMENTS |
|
|
|
| Quoted
Shares in Joint |
|
|
|
| Stock
Companies at |
|
|
|
| Market Value |
|
3 |
6,184,926 |
7,245,109 |
|
| CURRENT
ASSETS |
|
|
|
|
| Sundry Debtors |
|
|
|
40,904 |
32,472 |
|
| Cash
and Bank Balance |
|
4 |
984,842 |
4,165 |
|
| Deferred
Expenditure |
|
5 |
-- |
651,839 |
|
|
|
|
------------------ |
------------------ |
|
|
| Total
Current Assets |
|
|
1,025,746 |
688,476 |
|
|
|
|
|
------------------ |
------------------ |
|
| Total
Property and Assets |
|
|
8,761,319 |
8,832,393 |
|
|
|
|
========== |
========== |
|
|
|
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
|
|
|
| AUTHORIZED
SHARE CAPITAL |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
Subscribed and Paid up |
|
|
|
|
| Share
Capital in Ordinary |
|
|
|
|
| Certificates
of Rs. 10 each |
|
|
30,000,000 |
30,000,000 |
|
| Loss
Carried Forward |
|
|
(22,084,911) |
(21,917,024) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,915,089 |
8,082,976 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Trade
Creditors and Accruals |
|
6 |
194,391 |
50,841 |
|
| Due
to Investment Adviser |
|
|
|
|
| an
Associated Company |
|
7 |
-- |
46,737 |
|
| Due
to Investment Adviser |
|
|
|
|
| for
Public Issue Expense |
|
5 |
651,839 |
651,839 |
|
|
|
|
------------------ |
------------------ |
|
| Total
Current Liabilities |
|
|
846,230 |
749,417 |
|
|
|
|
|
========== |
========== |
|
| Total
Capital and Liabilities |
|
|
8,761,319 |
8,832,393 |
|
|
|
|
========== |
========== |
|
|
|
|
| Statement
of Income & Expenditure |
|
| For
the year ended June 30, 1999 |
|
|
|
|
NOTES |
1999 |
1998 |
|
|
|
|
Rs. |
Rs. |
|
|
|
|
| SALES |
|
|
49,039,262 |
19,097,876 |
|
| COST
OF SALES |
|
9 |
49,387,932 |
19,498,882 |
|
| CAPITAL
GAIN (LOSS) |
|
|
(348,670) |
(401,006) |
|
| OTHER
INCOME |
|
10 |
409,597 |
474,463 |
|
| GROSS
INCOME (LOSS) |
|
|
60,927 |
73,457 |
|
|
|
|
|
|
| LESS
OPERATING EXPENSES |
|
|
|
|
| Administrative
Expenses |
|
11 |
62,227 |
257,800 |
|
| Remuneration
Due to |
|
|
|
|
| Investment
Adviser |
|
8 |
161,532 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
223,759 |
257,800 |
|
|
|
|
------------------ |
------------------ |
|
| NET
INCOME (LOSS) FOR THE YEAR |
|
|
(162,832) |
(184,343) |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| APPROPRIATION
OF PROFITS |
|
|
|
| Opening
Balance (Loss) |
|
|
(21,917,024) |
(6,509,312) |
|
| Amortization
of Public Issue Expense |
|
|
-- |
-- |
|
| Provision
for Diminution in Value of Sec. |
|
3 |
-- |
(15,220,501) |
|
| Prior
Year Adjustments |
|
|
|
| (Preliminary
Expenses) |
|
|
|
|
|
|
|
| Taxation |
|
|
(5,055) |
(2,868) |
|
|
|
|
------------------ |
------------------ |
|
| Total/Appropriation |
|
|
(21,922,079) |
(21,732,681t |
|
|
|
|
========== |
========== |
|
|
|
|
|
| UNAPPROPRIATED
PROFIT (LOSS) |
|
|
|
| BALANCE
CARRIED FORWARD |
|
|
(22,084,911) |
(21,917,024) |
|
|
|
|
|
|
|
|
|
| Notes
to the Accounts |
|
| For
the Year Ended June 30, 1999 |
|
|
| 1.
Status and Nature of Business |
|
|
| 1.1
The company was incorporated as a public limited company in |
|
|
| May
1994 under the Companies Ordinance 1984 and was |
|
|
| registered
as an investment company under the Investment |
|
|
| Advisers
Rule 1971 and is listed on Karachi Stock Exchange. |
|
|
| The
company has entered into an agreement with an |
|
|
|
| associated
company-Safeway Fund limited to act as its |
|
|
| Investment
Adviser. The company obtained certificate of |
|
|
| commencement
of business in July 1994. It is a closed end |
|
|
| Mutual
Fund and its objective is to invest its assets in securities. |
|
|
|
|
|
| 1.2
The Mutual Fund has been approved by Corporate Law |
|
|
| Authority
under the Investment Companies and Investment |
|
|
| Advisers
Rule 1971. |
|
|
|
|
|
|
| 2.
Significant Accounting Policies |
|
|
|
|
|
|
| 2.1
Accounts Convention |
|
|
|
| These
accounts have been prepared under the historical cost |
|
| convention. |
|
|
|
|
| 2.2
Marketable Securities |
|
|
|
| The
company has valued its investments at lower at average |
|
| cost
and market value on an aggregate portfolio basis. Market |
|
| value
has been taken from Karachi Stock Exchange quotation |
|
| sheets
on the last working day of the accounting period. |
|
|
| 2.3
Revenue Recognition |
|
|
|
|
|
|
| i.
Dividend Income is recorded at the time of closure of |
|
| the
share transfer books of the company declaring the |
|
| dividend. |
|
|
|
| ii.
Sales and Purchases of securities are recognized on |
|
| the
date of contract. |
|
|
|
| iii.
Capital gains on sale of investment are taken to |
|
|
| income
of the period in which it arises. |
|
|
|
| 2.4
Deferred Expenditure |
|
| The
expenditure incurred on the incorporation and issue of |
|
| shares
is deferred and is to be amortized over a maximum |
|
| period
of five years form the period of deferment. |
|
|
|
| 2.5 Taxation |
|
|
|
| Provision
for taxation is based on taxable income at the current |
|
| rates.
The company is exempt from taxation if not less than |
|
| ninety
percent of its income of that year is distributed amongst |
|
| the
certificate holders under clause 56(1 A) of the second |
|
| schedule
of the Income Tax Ordinance 1979. |
|
|
|
| 2.6
Current investments being investments which are readily |
|
| realizable
and are intended to be held for not more than one |
|
| year
have been valued at lower of book value and market value |
|
| determined
for each investment individually. |
|
|
|
|
|
| Long
term investments being investments other than current |
|
| investments
are stated at book value. Carrying amount is |
|
| however
reduced for each investment individually where the |
|
| decline
in value is other than temporary. |
|
|
|
|
|
| 2.7
Previous year's figures have been rearranged, wherever |
|
| necessary,
to facilitate comparison. |
|
|
|
|
|
| 3.
Investment in Quoted Shares |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rs. |
Rs. |
|
|
|
|
|
| At Cost |
|
7,055,435 |
22,465,610 |
|
| Less
Diminution in Value |
|
(870,509) |
(15,220,501) |
|
|
|
------------------ |
------------------ |
|
| At
Market Value |
|
6,184,926 |
7,245,109 |
|
|
|
========== |
========== |
|
|
|
|
|
|
| 4.
Cash and Bank Balance |
|
984,842 |
4,165 |
|
|
|
|
========== |
========== |
|
|
|
|
| 5.
Deferred Expenditure Payable |
|
|
|
| Opening
Balance |
|
|
|
| Less
Transferred to Preliminary Exp. |
|
651,839 |
651,839 |
|
|
|
------------------ |
------------------ |
|
| Balance
Due to the Inv. Adviser |
|
651,839 |
651,839 |
|
| Less
Transferred to Current Maturity |
|
651,839 |
651,839 |
|
|
|
------------------ |
------------------ |
|
| Paid
entirely in September 1999 |
|
|
|
-- |
-- |
|
|
|
|
========== |
========== |
|
|
|
| 6.
Trade Creditors and Accruals |
|
| Sundry
Creditors |
|
27,859 |
45,841 |
|
| Accrued
Expenses |
|
|
5,000 |
5,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
32,859 |
50,841 |
|
|
|
|
========== |
========== |
|
|
|
|
| 7.
Due To Investment Adviser |
|
|
|
-- |
46,737 |
|
|
|
|
| 8.
Management Fee |
|
|
|
| Safeway
Fund Limited |
|
|
|
| 2%
of Net Assets |
|
161,532 |
161,660 |
|
| Less
Waived By Investment Adviser |
|
-- |
(161,660) |
|
|
|
------------------ |
------------------ |
|
|
|
161,532 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Total Due |
|
|
161,532 |
-- |
|
|
|
|
========== |
========== |
|
|
|
|
| The
Remuneration of the Investment Adviser at 2% of the net assets of the |
|
| company
as at the end of its year of account in terms of Clause 11 (A) of the |
|
| Investment
Advisers Rules 1971 has been determined as follows: |
|
|
|
|
| ASSETS |
|
|
|
| Preliminary
Expenses |
|
1,550,647 |
898,808 |
|
| Deferred
Expenditure |
|
-- |
651,839 |
|
| Long
Term Investments (Market Value) |
|
6,184,926 |
7,245,109 |
|
| Sundry Debtors |
|
40,904 |
32,472 |
|
| Cash
and Bank Balance |
|
984,842 |
4,165 |
|
|
|
------------------ |
------------------ |
|
| Total |
|
8,761,319 |
8,832,393 |
|
|
|
========== |
========== |
|
|
|
|
|
| LIABILITIES |
|
|
| Trade
Creditors and Accruals |
|
32,859 |
98,578 |
|
| Deferred
Expenditure Payable |
|
651,839 |
651,839 |
|
|
|
------------------ |
------------------ |
|
| Total |
|
684,698 |
750,417 |
|
|
|
========== |
========== |
|
| Net
Assets as per Rule |
|
8,076,621 |
8,081,976 |
|
|
|
========== |
========== |
|
| 2%
of Net Assets |
|
161,532 |
161,640 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rs. |
Rs. |
|
|
|
|
| 9. Cost of Sales |
|
|
|
| Opening
Stock at Market Value |
|
|
7,245,109 |
6,671,038 |
|
| Purchases
at Cost |
|
|
48,327,749 |
20,072,955 |
|
| Closing
Stock at Market Value |
|
|
6,184,926 |
7,245,109 |
|
|
|
|
------------------ |
------------------ |
|
| Cost of Sales |
|
|
49,387,932 |
19,498,884 |
|
|
|
|
========== |
========== |
|
|
|
|
| Closing
Stock at Cost |
|
7,055,439 |
22,465,610 |
|
| Diminution
in Value |
|
870,509 |
(15,220,501) |
|
|
|
------------------ |
------------------ |
|
| At
Market Value |
|
6,184,930 |
7,245,109 |
|
|
|
========== |
========== |
|
|
|
|
| 10.
Other Income |
|
|
|
| Dividends |
|
359,039 |
444,971 |
|
| Bank Interest |
|
50,538 |
29,867 |
|
| Less Zakat |
|
|
-- |
(375) |
|
|
|
------------------ |
------------------ |
|
|
|
409,577 |
474,463 |
|
|
|
|
========== |
========== |
|
|
|
|
| 11.
Administrative Expenses |
|
|
|
| Bank Charges |
|
|
325 |
-- |
|
| Custodian
Charges |
|
|
33,995 |
215,222 |
|
| Audit fee |
|
|
5,000 |
5,000 |
|
| Miscellaneous |
|
|
22,907 |
37,578 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
62,227 |
257,800 |
|
|
|
|
========== |
========== |
|
|
|
| Source
& Application of Funds |
|
| For
the Year Ended June 30, 1999 |
|
|
|
|
| Decrease
in Investments |
|
|
1,060,183 |
14,646,430 |
|
| Dividend
and Interest Income |
|
|
409,597 |
474,463 |
|
| Other
Items of Working Capital |
|
|
-- |
761,282 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
SOURCES |
|
|
1,469,780 |
15,882,175 |
|
|
|
|
========== |
========== |
|
|
|
|
| APPLICATION
OF FUNDS: |
|
|
|
| Provision for |
|
|
|
| Diminution
in value |
|
|
415,952 |
15,882,175 |
|
| Other
Items of Working Capital |
|
1,053,828 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
APPLICATION |
|
|
1,469,780 |
15,882,175 |
|
|
|
|
|
========== |
========== |
|
|
| Statement
of Income & Expenditure |
|
| of
Safeway Fund Limited |
|
| For
the Year Ended June 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rs. |
Rs. |
|
| INCOME |
|
|
|
| Dividends |
|
|
10,000 |
15,000 |
|
| Other Income |
|
|
156,710 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Total |
|
|
166,710 |
15,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| EXPENDITURE |
|
|
|
| Salaries |
|
|
235,895 |
200,670 |
|
| Telephone
and Utilities |
|
22,938 |
31,473 |
|
| Postage,
Stationery etc. |
|
4,586 |
12,375 |
|
| Depreciation |
|
|
142,751 |
141,139 |
|
| Repair
and Maintenance |
|
31,862 |
6,630 |
|
| Other Expenses |
|
|
32,766 |
29,631 |
|
| Audit Fee |
|
|
1,000 |
1,000 |
|
|
|
------------------ |
------------------ |
|
|
|
471,798 |
422,918 |
|
|
|
|
|
| Reimbursement
from |
|
|
|
| Safeway
Mutual Fund Limited |
|
