| Safe Mutual Fund Limited |
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| MR.
KHALIL AHMED |
Chairman |
|
|
| MR.
NASEER AHMED |
Chief Executive |
|
| MR.
M. ISMAlL MUGHAL |
|
| MR.
M. H. KAUSAR |
|
| MR.
K. G. RABBANI |
|
| MR.
A. FAHIM KHAN |
|
| MR.
SHAHEEN KHALIL |
|
|
| COMPANY
SECRETARY |
|
| MR.
M. H. KAUSAR |
|
|
| AUDITORS |
|
| MR.
SAEED SHEIKH & CO. |
|
| Chartered
Accountants |
|
|
| INVESTMENT
ADVISORS: |
|
| SAFEWAY
FUND LIMITED |
|
|
| REGISTERED
OFFICE: |
|
| Safeway
House |
|
| 20/21,
Amlani Town Home |
|
| Ch.
Khaliq uz Zaman Road, |
|
| Clifton-8,
Karachi. |
|
| Telephone:
5872128-571684 |
|
| 5860590-5870920 |
|
| Fax:
5872129 |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 4th Annual General Meeting of |
|
| the
company will be held on Saturday 26th December, 1998 at |
|
| 9:00
A.M. at Safeway House 20/21 Amlani Town House CH. |
|
| Khaliq-uz-Zaman,
Road Karachi to transact the following |
|
| business:- |
|
|
| AGENDA
OF THE MEETING |
|
|
| 1.
To confirm the minutes of third Annual General Meeting held on |
|
| 27th
December. 1997. |
|
|
| 2.
To receive, consider and adopt Audited Accounts and Balance |
|
| Sheet
together with Director and Auditors report thereon for the |
|
| year
ended 30th June 1998. |
|
|
| 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 order of the Board |
|
|
|
|
|
|
|
|
|
Naseer Ahmed |
|
| Karachi.
171h Nov. 1998 |
|
Chief Executive |
|
|
|
| DIRECTORS
REPORTS TO THE SHAREHOLDERS |
|
|
| The
Directors have Pleasure in placing their Report and |
|
| Audited
Accounts for the year ended June 30, 1998 before |
|
| the
Fourth Annual General Meeting of the Company to be |
|
| held
on December 26, 1998. |
|
|
| The
period under review had been a very difficult for the |
|
| stock
markets in Pakistan. The market showed severe bearish |
|
| tendency
during this period and the KSE index fell |
|
| below
1000 level. This was mainly due to the political |
|
| developments
witnessed at home and abroad. Your |
|
| directors
are of the view that the market should remain |
|
| and
operate around this level in the near future and we |
|
| do
not see an upturn so quickly unless there are some |
|
| structural
changes made at the national level. Therefore |
|
| your
Directors have decided to white down the portfolio |
|
| value
of Rupees 152,20,501 during the year. |
|
|
| During
the period under review, the Mutual Fund sustained |
|
| a
net loss of Rs. 184,343 after adjusting all the expenses. |
|
| This
is by no means a satisfactory performance. |
|
|
| This
results in a total accumulated losses of |
|
| Rupees
21,917,024 from inception to date. We are thankful |
|
| to
the safeway Fund Limited, the Management Company |
|
| for
its waiver of expenses this year. This was a great relief |
|
| to
the Mutual Fund. |
|
|
| The
Directors would like to record its appreciation for the |
|
| valuable
contribution made by all the employees. |
|
|
|
|
For and behalf of the Board |
|
|
|
|
|
|
|
Naseer Ahmed |
|
|
|
Chief Executive |
|
|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance sheet of SAFEWAY MUTUAL |
|
| FUND
LIMITED as at 30th June 1998, and the related Profit and |
|
| Loss
Account and statement of changes in financial position, 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 |
|
| purpose
of our audit and, after due verification thereof, 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
Advisers, Rules 1971. |
|
|
| b)
In our opinion; |
|
|
| i)
The balance sheet and profit and 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 account and |
|
| are
further in accordance with accounting policies consistently applied: |
|
|
| ii)
The expenditure incurred during the period was for the purpose |
|
| of
the company's business; and |
|
|
| iii)
The business conducted, investments made and the expen- |
|
| diture
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 and Loss Account and |
|
| the
statement of source and application 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 affairs as at 30th June 1998, |
|
| 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 Usher |
|
| Ordinance,
1980, was deducted by the company and deposited in the |
|
| central
Zakat fund established under section 7 of that ordinance. |
|
|
| Karachi. |
|
|
|
Saeed Sheikh & co. |
|
| Dated
07-07-1998 |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE, 1998 |
|
|
|
|
NOTE |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
| PRELIMINARY
EXPENSES |
|
|
898,808 |
898,808 |
|
| INVESTMENTS |
|
|
|
| Quoted
shares in Joint stock |
|
|
|
| Companies |
|
(3) |
7,245,109 |
21,891,539 |
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
|
| Sundry
Debtors |
|
|
32,472 |
690,372 |
|
| Cash
and Bank Balance |
|
(4) |
4,165 |
246,539 |
|
| Deferred
Expenditure |
|
(5) |
651,839 |
651,839 |
|
|
|
|
---------- |
---------- |
|
| Total
Current Assets |
|
|
688,476 |
1,588,750 |
|
|
|
|
---------- |
---------- |
|
|
|
|
8,832,393 |
24,379,097 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 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 |
|
| Unappropriated
Profit balance |
|
(21,917,024) |
(6,509,312) |
|
|
|
---------- |
---------- |
|
|
|
8,082,976 |
23,490,688 |
|
| Due
to investment Adviser for |
|
(5) |
|
| the
public issue expenses |
|
|
- |
325,919 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Trade
creditors & Accruals |
|
(6) |
50,841 |
236,570 |
|
| Due
to Investment Adviser |
|
(7) |
- |
- |
|
| an
associated company |
|
|
46,737 |
- |
|
| Due
to Investment Adviser for |
|
(5) |
|
|
| the
public issue exp. |
|
|
651,839 |
325,920 |
|
|
|
|
---------- |
---------- |
|
| Total
current liabilities |
|
|
749,417 |
562,490 |
|
|
|
|
---------- |
---------- |
|
|
|
|
8,832,393 |
24,379,097 |
|
|
|
|
========== |
========== |
|
|
| INCOME
AND EXPENDITURE ACCOUNT |
|
| FOR
THE ENDED 30TH JUNE, 1998 |
|
|
|
|
|
NOTES |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| SALES |
|
|
|
19,097,876 |
37,393,564 |
|
| COST
OF SALES |
|
(9) |
19,498,882 |
37,660,894 |
|
| CAPITAL
GAIN (LOSS) |
|
|
(401,006) |
(267,330) |
|
| OTHER
INCOME |
|
(10) |
474,463 |
646,315 |
|
| GROSS
INCOME (LOSS) |
|
|
73,457 |
378,985 |
|
| LESS
OPERATING EXPENSES |
|
|
|
|
| ADMINISTRATIVE
EXPENSE |
|
(11) |
257,800 |
238,727 |
|
| REMUNERATION
DUE TO |
|
|
|
|
| INVESTMENT
ADVISOR |
|
(8) |
- |
230,000 |
|
| INTEREST
ON PRELIMINARY |
|
|
|
|
| AND
PUBLIC ISSUE EXP. |
|
(8) |
- |
65,184 |
|
|
|
|
---------- |
---------- |
|
|
|
|
257,800 |
533,911 |
|
|
|
|
========== |
========== |
|
| NET
INCOME (LOSS) FOR THE YEAR |
|
(184,343) |
(154,926) |
|
|
|
========== |
========== |
|
|
|
|
|
| APPROPRIATION
OF PROFITS |
|
|
| OPENING
BALANCE (LOSS) |
|
(6,509,312) |
(6,921,599) |
|
| AMORTISATION
OF PUBLIC |
|
|
|
| ISSUE
EXPENSES |
|
- |
(325,920) |
|
|
|
|
|
| PROVISION
FOR DIMINUTION |
|
|
|
| IN
VALUE OF SECURITY |
|
(3) |
(15,220,501) |
- |
|
| PRIOR
YEAR ADJUSTMENT |
|
|
|
| (PRELIMINARY
EXP.) |
|
- |
898,808 |
|
| TAXATION |
|
|
(2,868) |
(5,675) |
|
|
|
|
---------- |
---------- |
|
| TOTAL
APPROPRIATION |
|
|
(21,732,681) |
(6,354,386) |
|
|
|
|
========== |
========== |
|
| UNAPPROPRIATED
PROFIT (LOSS) |
|
|
| BALANCE C/F |
|
|
(21,917,024) |
(6,509,312) |
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1998. |
|
|
| 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 regi- |
|
| stered
as an investment Company under the Investment |
|
| Companies
and Investment Adviser Rules 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 duly 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
Rules 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 of |
|
| 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 recognised on the date of |
|
| contract. |
|
|
|
|
|
|
| (iii)
Capital gains on sale of investment is 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 amortised over a maximum period of five years |
|
| form
the year 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 per cent |
|
| 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 Ordin- |
|
| ance 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 investments 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. |
|
|
| 3.
INVESTMENTS IN QUOTED SECURITIES |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| AT COST |
|
|
22,465,610 |
21,391,539 |
|
| Less diminution in |
value |
|
(15,220,501) |
- |
|
|
|
---------- |
---------- |
|
| At
market value |
|
7,245,109 |
- |
|
|
|
|
| 4.
CASH AND BANK BALANCE |
|
|
4,165 |
246,539 |
|
|
|
|
| 5.
DEFERRED EXPENDITURE PAYABLE |
|
|
|
| Opening
balance |
|
|
651,839 |
977,759 |
|
| Less
repaid during the year |
|
|
|
325,929 |
|
| Balance
due to the Investment |
|
|
651,839 |
651,839 |
|
| Adviser
Less transferred to current |
|
651,839 |
325,920 |
|
| maturity |
|
|
|
---------- |
---------- |
|
|
|
- |
325,919 |
|
|
|
|
|
|
| (6)
TRADE CREDITORS AND ACCRUALS |
|
|
|
| Sundry
Creditors |
|
45,841 |
231,580 |
|
| Accrued
expenses |
|
5,000 |
5,000 |
|
|
|
---------- |
---------- |
|
|
|
50,841 |
236,570 |
|
|
|
|
|
| 7.
DUE TO INVESTMENT ADVISER |
|
|
46,737 |
- |
|
|
|
|
|
|
|
| (8)
MANAGEMENT FEE |
|
|
|
|
|
|
| Safeway
Fund Limited |
|
|
|
| 2
per cent of net assets |
|
161,660 |
469,813 |
|
| Less
waived by the investment adviser |
|
161,660 |
239,813 |
|
|
|
---------- |
---------- |
|
|
|
- |
230,000 |
|
| Restricted
to |
|
|
|
| Interest
on deferred liability |
|
|
|
| 10%
p.a on deferred expenditure-waived |
|
- |
65,184 |
|
|
|
|
|
---------- |
---------- |
|
| Total Due |
|
|
|
- |
295,184 |
|
|
========== |
========== |
|
|
| The
remuneration of the Investment Adviser at 2% of the net assets |
|
| of
the company as at the end of its your of account in terms of |
|
| clause
11(a) of the Investment Companies and Investment Advisers |
|
| Rules
1971 has been determined as follows: |
|
|
|
|
|
| ASSETS |
|
|
|
| Preliminary
Expenses |
|
|
898,808 |
898,808 |
|
| Deferred
Expenditure |
|
|
651,839 |
651,839 |
|
| Long
term Investments |
|
|
7,245,109 |
21,008,834 |
|
| Marketable
Securities at market value |
|
- |
882,705 |
|
| Sundry
Debtors |
|
|
32,472 |
690,372 |
|
| Cash
and Bank balances |
|
|
4,165 |
246,539 |
|
|
|
---------- |
---------- |
|
|
|
8,832,393 |
24,379,097 |
|
|
|
========== |
========== |
|
| LIABILITIES |
|
|
|
| Trade
Creditors and accruals |
|
|
97,578 |
236,570 |
|
| Deferred
expenditure payable |
|
|
651,839 |
651,839 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
749,417 |
888,409 |
|
|
|
|
|
|
| Net
assets as per rules |
|
|
8,082,976 |
23,490,688 |
|
| 2
% of net assets |
|
|
|
161,660 |
469,813 |
|
|
|
|
|
| STATEMENT
OF SOURCES AND APPLICATION OF FUNDS |
|
| (CASH
FLOW) FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
|
|
|
|
|
|
Year Ended |
Year Ended |
|
|
|
|
June 30 |
June 30 |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| SOURCES
OF FUND |
|
|
|
|
|
|
| Decrease
in Investments |
|
|
14,646,430 |
2,771,089 |
|
| Other
Items of Working capital |
|
|
761,282 |
- |
|
|
|
|
|
---------- |
---------- |
|
| TOTAL
SOURCES |
|
|
|
15,407,712 |
2,771,089 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| APPLICATION
OF FUNDS |
|
|
|
|
|
|
| Amortisation
of Deferred |
|
|
|
| Expenditure |
|
|
|
- |
325,920 |
|
| Capital
lose for the year after |
|
|
|
| adjustments
off provision for |
|
|
|
| diminution
in value etc. |
|
|
15,407,712 |
160,601 |
|
|
|
|
|
|
| Repayment
of Current Liabilities |
|
|
- |
2,284,568 |
|
|
|
|
|
---------- |
---------- |
|
| TOTAL
APPLICATION |
|
|
|
15,407,712 |
2,771,089 |
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| STATEMENT
OF INCOME AND EXPENDITURE |
|
| FOR
THE ENDED 30TH JUNE, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
|
|
|
| Dividends |
|
|
|
15,000 |
98,850 |
|
| Remuneration
from Safeway Mutual Fund |
|
- |
230,000 |
|
| Interest
on defend expenditure |
|
|
- |
65,184 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
15,000 |
304,034 |
|
|
|
|
| EXPENSES |
|
|
|
|
|
|
| Salaries |
|
|
|
200,670 |
390,630 |
|
| Telephone
and Utilities |
|
|
31,473 |
31,270 |
|
| Postage
Stationery etc. |
|
|
12,373 |
3,893 |
|
| Depreciation |
|
|
|
141,139 |
141,139 |
|
| Repair
and maintenance |
|
|
|
6,630 |
11,418 |
|
| Other
Expenses |
|
|
|
29,631 |
2,253 |
|
| Audit Fee |
|
|
|
1,000 |
2,000 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
422,918 |
582,603 |
|
|
|
|
|
========== |
========== |
|
| Excess
of expenditure over income |
|
|
407,918 |
188,569 |
|
|
|
| DETAIL
OF PORTFOLIO |
|
| AS
ON 30TH JUNE 1998 |
|
|
| COMPANY'S |
|
Opening |
Purchase |
Sale |
Closing |
Balance |
Rate |
Market |
| NAME |
|
Balance |
|
Quantity |
Value |
|
Value |
|
|
|
Rs. |
Rs. |
Rs. |
|
| Asian
Leasing |
68,195 |
5,000 |
5,500 |
67,695 |
1,820,115 |
3.00 |
203,085 |
| Dawood
Leasing |
500 |
- |
500 |
- |
- |
- |
- |
| Ibrahim
Leasing |
62,800 |
- |
31,000 |
31,800 |
101,760 |
4.25 |
135,150 |
| N.D.L.C. |
|
250 |
125 |
- |
375 |
2,001 |
4.00 |
1,500 |
| Pilcorp |
|
84,600 |
- |
11,000 |
73,600 |
2,662,242 |
9.25 |
680,800 |
| Union
Leasing |
134,300 |
32,440 |
5,000 |
161,740 |
2,219,477 |
3.15 |
509,481 |
| Al-Faysal
Inv. Bank |
112,125 |
47,275 |
3,000 |
156,400 |
3,191,558 |
10.00 |
1,564,000 |
| Al-Towfeek
Inv. Bank |
5,000 |
500 |
5,500 |
- |
- |
- |
- |
| Atlas Bank |
|
6,975 |
- |
- |
6,975 |
204,301 |
8.70 |
60,683 |
| Askari Bank |
|
- |
10,000 |
10,000 |
- |
- |
- |
- |
| Bank
of Punjab |
- |
15,204 |
15,000 |
204 |
4,494 |
6.50 |
1,326 |
| Crescent
Inv. Bank |
30,900 |
16,500 |
- |
97,400 |
2,364,731 |
6.00 |
584,400 |
| Faysal
Comm. Bank |
- |
5,000 |
- |
5,000 |
74,650 |
9.00 |
45,000 |
| Inter
Inv. Bank |
4,500 |
- |
4,000 |
500 |
11,767 |
9.00 |
4,500 |
