Close-end Mutual Funds: ASIAN STOCKS FUND LIMITED - Year Ended June 30, 2005 (Audited)
Asian Stocks Fund Limited (ASFL) was incorporated as a public limited company on June 13, 1994 under the Companies Ordinance, 1984. It was registered as an Investment Company under the Investment Companies & Investment Advisors Rules, 1971 [since repealed and replaced by the NBFC (Establishment & Regulation) Rules, 2003].
It is listed on Karachi, Lahore and Islamabad Stock Exchanges. The company's objective is to invest its assets in securities, which are listed or an application has been made to the Stock Exchanges for the listing.
ASFL has entered into an agreement with the Asian Capital Management Limited (an associated company) to act as its Investment Advisor. MCB Bank Limited is the approved custodian of the securities of the company. Central Depository Company of Pakistan Limited was appointed as the new custodian of ASFL Registered office of the company is located in Lahore.
Paid up capital of ASFL at Rs 900 million on June 30, 2005, is held by 913 shareholders. However, holding by the general public is only 0.93 %. Shareholders holding more than 10% shares include: Crescent Commercial Bank Limited (33.26%), Shakargang Mills Limited (17.22%), Asian Capital Management Limited (10%) and Faysal Bank Limited (32.50%). Other substantial shareholders include: Crescent Standard Investment Bank Limited (2.81%) and Crescent Standard Business Management (Pvt.) Limited (1.27%). The rest of the shares are held by corporate entities.
With the increase in paid up capital to Rs 900 million during 2005, ASFL has now become a substantial player in the equities market. Prior to that it was just subsisting as is seen from its earnings/(Loss) per share and dividend distribution for the last 10 years as under:
=======================================
Year ended EPS Dividend
=======================================
June 30, Rs %
=======================================
1996 -0.03 -
1997 -1.07 -
1998 -3.86 -
1999 0.28 -
2000 1.74 10%
2001 -0.93 -
2002 -0.32 -
2003 2.33 -
2004 0.41 -
2005 -0.30 -
=======================================
ASFL issued shares against Rs 98 million deposit against right issue during 2005. Further right shares were also issued raising to total paid up capital to Rs 900 million as on June 30, 2005 (2004: Rs 100 million). Fresh cash injected in the company was used mostly to make short term and long term investments in shares. Total assets as on June 30 have risen to Rs 849 million as against Rs 167 million on June 30, 2004, four-fold increase. The company is now poised to play a much bigger role on the stock markets in Pakistan.
The company suffered loss after tax of Rs 19.892 million during the year ended June 30, 2005 against a profit after tax of Rs 3.155 million for the last year. During the year under review, ASFL suffered a big setback in the shape of loss on sale of securities at Rs 66.738 million (2004: Loss of Rs 3.178 million). Comparative performance statistics are given below.
The remuneration of the Investment Advisor is the major expense item. Remuneration payable to the Investment Adviser has been calculated at the rate of 2% per annum of the average net assets of the company. On this basis, the remuneration worked out at Rs 14.597 million (2004: Nil). The Statement of Income and Expenditure of Investment Advisor in relation to the Investment Company for the year ended June 30, 2005, given in the financial statements under review, shows profit after tax at Rs 5.489 million (2004: Loss Rs 2.131 million).
Regarding the current year losses, the Directors in their Report state that due to phasing out of Badla with margin financing / continuous financing system (CFS) the Stock Market was under immense pressure during the month of April 2005 and onward. Consequently ASFL incurred losses (realised and unrealised), which offset the gains earned during the previous periods. In the subsequent period such losses have been recouped to some extent due to recovery in the stock market index. As the investments were made in the good rating securities, management expects reasonable return, in the near future.
As regards ASFL investment policy, the Directors state that it inter alia aims at providing superior results through investment in quality growth stocks selected on the basis of their potential capital appreciation possibilities as well as dividend potential so as to benefit its investors/shareholders with regular income as well as long term growth potential.
ASFL either invests in ordinary stocks of listed equities or distributes its funds between these ordinary stocks and other securities listed on three stock exchanges of the country such as fixed income securities, PTCs, modaraba certificates, etc. Further, ASFL reportedly strives to ensure that exposure limit of 10% in respect of each security is adhered to and the composition of stocks in different sectors has relatively low correlation among each other.
================================================================
Performance Statistics (Audited)
Balance Sheet (Rs in 000)
================================================================
As on June 30, 2005 2004
================================================================
Cash and bank: 30,617 63,055
ST Investments: 157,761 95,222
Advances: 4,263 1,096
Receivables-Unsecured: 134,388 7,950
Total current assets: 327,029 167,323
Total Non-current assets-LT Invest.: 522,305 0
Operating Fixed assets: 0 0
Total assets: 849,334 167,323
Total Current Liabilities: 16,221 7,792
Total Capitalization: 833,113 159,531
Non current Liabilities: 0 0
Net Assets: 833,113 159,531
Share capital: 900,000 100,000
Deposit for Right Shares: 0 98,000
Gain on re-measure. AFS Invest.: -8,527 0
Un-appropriated profit: -58,360 -38,469
Total equity: 833,113 159,531
----------------------------------------------------------------
Ratios:
----------------------------------------------------------------
ST Investment/Total Assets: 19% 57%
LT Investments/Total Assets: 61% 0%
Current Assets/Total Assets: 39% 100%
Cur. Assets/Cur. Liabilities- (Times): 20 21
Total Equity/Total Assets: 98% 95%
Book Value/Share-Rs: 9.26 15.95
Market Value/share (20-2-06)- Rs: 9.40 -
Price/Book Value, share- X: 1.02 -
----------------------------------------------------------------
Income Statement (Rs in 000)
----------------------------------------------------------------
Year ended June 30, 2005 2004
----------------------------------------------------------------
Income
----------------------------------------------------------------
Gain on sale of shares: -66,738 -3,178
Gain on re-measure. ST Invest.: 54,399 5,826
Gain on disposal of LT Invest: 0 0
Dividends: 11,181 3,758
Profit on deposits: 14 199
Other income: 0 0
Total Income: -1,144 6,605
----------------------------------------------------------------
Operating Expenses
----------------------------------------------------------------
Remuneration - Investment advisor: 14,597 0
Remuneration, custodian: 2533 536
Annual fee, SECP: 780 79
Other Expenses: 468 2,577
Total Expenses: 18,378 3,192
Operating Income: -19,522 3,413
Profit before tax: -19,522 3,413
Provision for tax: 370 258
Profit after tax: -19,892 3,155
----------------------------------------------------------------
Ratios:
----------------------------------------------------------------
Earnings per share - Rs: -0.22 0.32
Gain, re-measure, Invest/T. Income: 79% 88%
Dividend Income/Total Income: -2% 57%
Remun. of Advisor/Total Expense: 79% 0%
Return on Equity: -2% 2%
Cash dividend: 0.0% 0%
----------------------------------------------------------------
Cash flow Summary 2005 2004
----------------------------------------------------------------
Net Cash flow, Operations: -203,606 -42,792
Net Cash flow, Investing: -530,832 0
Net Cash flow, Financing: 702,000 98,000
Net change in liquidity: -32,438 55,208
Net Liquidity at beginning: 63,055 7,847
Net Liquidity at end: 30,617 63,055
================================================================
COMPANY INFORMATION: Investment Advisor: Asian Capital Management Limited; Chairman: Mahmood Ahmed; Chief Executive Officer: Ahmed Reza; Director: S.M. Yusuf; Chief Financial Officer & Company Secretary: Tahir Mubeen; CUSTODIAN: MCB Bank Limited (Being replaced with CDC Pakistan); REGISTERED OFFICE: 4th Floor, Crescent Standard Tower, 10-B, Block E-2, Gulberg III, Lahore; Auditors: Syed Husain & Co, Chartered Accountants; Web ADDRESS: Not Provided.
Comments
Comments are closed.