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Golden Arrow Selected Stock Fund Limited
Annual Report 1999
CONTENTS
Board of Directors and Company Information
Notice of Meeting
Directors' Report
Pattern of Shareholding
Auditors' Report
Balance Sheet
Profit and Loss Account
Distribution Statement
Statement of Movement in Equity and Reserves
Statement of Changes in Financial Position
Notes to the Accounts
Investment Adviser's Statement of Income and Expenditure in relation to Investment Company
BOARD OF DIRECTORS
Mr. Said Ahmed			Chairman
Mr. Mohammad Basheer Janmohammed			Director
Mr. Ahmed Abdul Sattar			Director
Mr. Muhammad Atiq			Director
Mr. Muhammad Hashim Khan			Nominee Director of ICP
Malik M. Parvez Akhtar			Director
Mr. Mohammed Ashraf Kothari			Director and Chief Executive
INVESTMENT ADVISER
Golden Arrow Investment & Research (Private) Limited
607, Uni Tower,
I.I. Chundrigar Road,
Karachi.
CUSTODIAN
National Bank of Pakistan,
I.I. Chundrigar Road, Karachi.
AUDITORS
Taseer Hadi Khalid & Co.,
Chartered Accountants,
First Floor, Sheikh Sultan Trust Bldg. No. 2,
Beaumont Road,
Karachi.
LEGAL ADVISER
All Daraz Siddiqui,
C/o. Noorallah A. Manji,
5th Floor, Jubilee Insurance House,
I.I. Chundrigar Road, Karachi.
REGISTERED OFFICE
607, Uni Tower,
I.I. Chundrigar Road, Karachi.
NOTICE OF MEETING
Notice is hereby given that the Sixteenth Annual General Meeting of Golden Arrow Selected Stocks
Fund Limited will be held on Tuesday, 28th December, 1999 at 10:30 a.m. at 703, Uni Tower, I.I. Chundrigar
Road, Karachi to transact the following business:-
-- To confirm the Minutes of the Annual General Meeting held on 29th December, 1998.
-- To receive, consider and adopt the Audited Accounts together with the Directors' and Auditors' Report
for the year ended 30th June, 1999.
-- To consider and approve recommendation of Directors to declare cash dividend at the rate of 5% to the
Shareholders whose names appear in the Register of Members as on 21st December, 1999.
-- To appoint Auditors of the Company and to fix their remuneration. The present Auditors, Messrs. Taseer
Hadi Khalid & Co., Chartered Accountants, retire and being eligible, offer themselves for re-appointment.
-- To transact any other business as may be placed before the meeting with the permission of the Chair.
					By Order of the Board
Karachi: 4th December, 1999					Company Secretary
NOTES:
1. A member entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of
him/her at the meeting. Proxies must be deposited at the Company's Registered Office not less than 48
hours before the time for holding the meeting. A proxy must be a member.
2. The Share Transfer books of the Company will remain closed from 22nd December, 1999 to 28th
December, 1999 (both days inclusive).
3. The Shareholders are advised to notify the Company of any change in their addresses to ensure prompt
delivery of mails. Any shares for transfers etc. should also be lodged with the Company.
DIRECTORS' REPORT
The Directors of Golden Arrow Selected Stocks Fund Ltd. are pleased to present this report, together with
Accounts of the Fund for the financial year ended 30th June, 1999.
MARKET BEHAVIOUR
There has been continuous volatile trend prevailing in the Capital Market since July 1998. The first half of
the year under review has really been erratic as most of the time market remained depressed due to well-
known factors such as impact of international economic sanctions due to nuclear blast, continuous decline in
economic activities, alarming low level of foreign exchange reserves etc. In the second half market behaved
slowly and cautiously except during April and May whereas market showed tremendous improvement of
around 400 points in months time but that momentum had sudden break due to famous Kargil factor. To
summarise the market behaviour during the period following factors had continuous influences on the market.
- Uncertainty about IPPs' issues specially of market favourite Hubco.
- Slow economy growth.
- Low exports due primarily to international recession.
- Continuous increase at alarming pace in foreign as well as local debts.
- Not a clean bill from IMF and World Bank.
- Negligible inflow of foreign funds and investment.
Stock Market is an acutely sensitive instrument for gauging the country's economy. It foresees any
possible changes in policies, long before it is realized by the general public and the impact is accordingly
reflected in its quoted prices. Due to the heavy burden of foreign debts we have been unable to curb the
involvement and interference of International Lending Agencies and have perforce to shape economic policies
in the light of conditionalities laid-down byes. them. The ultimate impact of such policies is, nevertheless, felt
upon various sectors of the economy.
OPERATIONAL RESULTS
The Company's profit amounted to Rs. 7.80 million as at 30th June 1999 as against the loss of Rs. 13.67
million for the preceding year. The increase in profit is due to improvement of KSE Index from 880 points on
30-06-98 to 1055 points on 30-06-99. This figure of profit has been arrived at after meeting administrative
expenses, custodian fee, auditors' remuneration, the fee of 1% of the net assets of the company to
investment adviser and finally reversal of provision for diminution in value of marketable securities by Rs. 9.92
million.
FUTURE PROSPECTS
It is difficult to predict future prospects in wake of the ever-changing scenario of country's
macroeconomics as well as political situation. To this date, we have seen continuous change in the previous
Governments, which normally puts break on economic policies of the respective Governments. The main task
of the current Government is to address above referred issues presently effecting the growth of country's
economy as well as smooth functioning of capital market of the country,
Therefore, your company's future is dependent largely on improvement in the country's economy and
greater stability and buoyancy in the capital market,
Y2K COMPLIANCE
The company has successfully complied with the Year 2000 issue in respect of millennium bug.
ACKNOWLEDGMENTS
The Directors would like to take this opportunity of thanking the Securities & Exchange Commission of
Pakistan and Ministry of Finance for their support to the Company.
The Board also appreciate the devoted work done by the staff and officers of the company.
					For and on behalf of the Board
					SAID AHMED
Karachi: 2nd December, 1999					Chairman
PATTERN OF SHAREHOLDING AS AT 30TH JUNE 1999
No. of	Having Shares
Shareholders	From	To	Shares Held	Percentage
438	1	100	27,388	0.17
650	101	500	176,059	1.09
513	501	1,000	413,814	2.55
1,091	1,001	5,000	2,647,260	16.33
225	5,001	10,000	1,614,863	9.96
76	10,001	15,000	977,086	6.03
31	15,001	20,000	558,873	3.45
15	20,001	25,000	332,232	2.05
3	25,001	30,000	81,225	0.50
10	30,001	35,000	333,963	2.06
1	35,001	40,000	38,653	0.24
2	40,001	45,000	82,391	0.51
3	45,001	50,000	144,596	0.89
3	50,001	55,000	157,579	0.97
3	55,001	60,000	173,930	1.07
3	60,001	65,000	187,350	1.15
1	65,001	70,000	70,000	0.43
2	75,001	80,000	155,533	0.96
1	80,001	85,000	84,000	0.52
1	85,001	90,000	87,500	0.54
4	95,001	100,000	394,789	2.44
1	100,001	105,000	105,000	0.65
1	115,001	120,000	119,000	0.73
2	140,001	145,000	286,996	1.77
1	165,001	170,000	166,500	1.03
1	180,001	185,000	182,971	1.13
1	190,001	195,000	191,672	1.18
1	245,001	250,000	247,800	1.53
1	250,001	255,000	254,523	1.57
1	265,001	270,000	266,800	1.65
1	330,001	335,000	332,980	2.05
1	365,001	370,000	367,920	2.27
1	455,001	460,000	458,000	2.82
1	465,001	470,000	465,082	2.87
1	580,001	585,000	584,732	3.61
1	1,295,001	1,300,000	1,296,940	8.00
1	2,140,001	2,145,000	2,144,000	13.23
------------------			------------------	------------------
3,093			16,210,000	100.00
==========			==========	==========
CATEGORIES OF SHAREHOLDERS AS ON 30 JUNE 1999
Particulars			Shareholders	Shareholding	Percentage
Individuals			3,048	8,187,033	50.0
Insurance Companies			4	94,999	0.59
Joint Stock Companies			25	4,461,004	27.52
Financial Institution			8	2,794,755	17.24
Modaraba Companies			4	354,509	2.19
Leasing Companies			2	173,500	1.07
Non Resident			1	2,000	0.01
Others			1	142,200	0.88
			------------------	------------------	------------------
			3,093	16,210,000	100.00
			==========	==========	==========
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed Balance Sheet of Golden Arrow Selected Stocks Fund Limited as at
30 June 1999 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 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 purposes 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 manners so required and respectively give a
true and fair view of the state of the Company's affairs as at 30 June 1999 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.
					TASEER HADI KHALID & CO.
Karachi: 2nd December, 1999					Chartered Accountants
BALANCE SHEET AS AT 30 JUNE 1999
				NOTE	1999	1998
					(Rupees '000)
ASSETS
Deferred Expenditure				3	--	136
CURRENT ASSETS
Marketable securities				4	43,215	49,404
Short Term Investments					--	2,500
Advances, prepayments and other receivables				5	1,138	1,144
Bank balances on current account					17,325	1,870
					------------------	------------------
					61,678	54,918
					------------------	------------------
Total Assets					61,678	55,054
LIABILITIES
Deferred expenditure payable				6	--	62
CURRENT LIABILITIES
Due to shareholders on reduction of capital					45	45
Current maturity of deferred expenditure payable				6	62	62
Creditors and accrued expenses				7	116	839
Due to investment adviser - an associated company				8	568	539
Unclaimed dividend					295	322
Provision for taxation				9	350	440
Proposed dividend					4,053	--
					------------------	------------------
					5,489	2,247
					------------------	------------------
Total Liabilities					5,489	2,309
					------------------	------------------
Net Assets					56,189	52,745
					==========	==========
CAPITAL AND RESERVES
Share Capital
Authorised
60,000,000 ordinary shares of Rs. 5/- each					300,000	300,000
					==========	==========
Issued, Subscribed and Paid-up
16,210,000 ordinary Shares of Rs. 5/- each				10	81,050	81,050
Reserves
Share premium					6,700	6,700
General reserve					500	500
Accumulated loss					(32,061)	(35,505)
					------------------	------------------
					(24,861)	(28,305)
					------------------	------------------
					56,189	52,745
					==========	==========
These accounts should be read in conjunction with the attached notes.
	SAID AHMED				M. ASHRAF KOTHARI
	CHAIRMAN				DIRECTOR
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 1999
				NOTE	1999	1998
					(Rupees '000)
Sales of marketable securities					131,520	10,487
Cost of sales of marketable securities				11	136,945	7,593
					------------------	------------------
(Loss)/Gain on sale of marketable securities					(5,425)	2,894
Other income				12	4,355	5,609
					------------------	------------------
					(1,070)	8,503
OPERATING EXPENSES
Administrative				13	438	384
Financial				14	7	13
Remuneration to the investment adviser				8.1	562	527
					------------------	------------------
					1,007	924
					------------------	------------------
					(2,077)	7,579
Reversal of provision for/(Provision for) diminution
in value of marketable securities					9,922	(21,253)
					------------------	------------------
Profit/(Loss) for the year before taxation					7,845	(13,674)
Taxation -- Current Year				9	350	440
-- Prior Year					(2)	88
					------------------	------------------
					348	528
					------------------	------------------
Profit/(Loss) for the year after taxation					7,497	(14,202)
					==========	==========
These accounts should be read in conjunction with the attached notes.
	SAID AHMED
	CHAIRMAN				M. ASHRAF KOTHARI
					DIRECTOR
DISTRIBUTION STATEMENT
FOR THE YEAR ENDED 30 JUNE 1999
					1999	1998
					(Rupees '000)
Accumulated loss brought forward					(35,505)	(21,303)
Net Profit/(Loss) for the year					7,497	(14,202)
Proposed dividend @ 5% (1998: Nil)					(4,053)	--
					------------------	------------------
Accumulated loss carried forward					(32,061)	(35,505)
					==========	==========
	SAID AHMED				M. ASHRAF KOTHARI
	CHAIRMAN				DIRECTOR
STATEMENT OF MOVEMENT IN EQUITY AND RESERVES
FOR THE YEAR ENDED 30 JUNE 1999
					1999	1998
					(Rupees '000)
Net Assets per share as at 01 July					3.25	4.13
Profit/(Loss) for the year - per share					0.22	(0.88)
					------------------	------------------
Net assets per share as at 30 June				Rupees	3.47	3.25
					==========	==========
	SAID AHMED				M. ASHRAF KOTHARI
	CHAIRMAN				DIRECTOR
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 1999
					1999	1998
					(Rupees '000)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit / (Loss)before taxation					7,845	(13,674)
Adjustment for:
Amortisation of deferred .expenditure					136	136
(Reversal of provision)/provision for diminution in value of
marketable securities					(9,922)	21,253
					------------------	------------------
					(1,941)	7,715
Changes in Operating assets / liabilities
Decrease / (Increase) in current assets
Marketable securities					16,111	(5,489)
Short term investment					2,500	(2,500)
Prepayments & other receivables					127	(399)
(Decrease) / increase in current liabilities
Creditors and accrued expenses					(723)	791
Due to investment adviser					29	(155)
					------------------	------------------
					18,044	(7,752)
Income tax paid					(559)	(249)
					------------------	------------------
Net cash flows from operating activities					15,544	.(286)