ACCOUNTS FOR THE QUARTER AND NINE MONTHS ENDED MARCH 31, 2006

Transcription

1

2 Fund Information 2 Mission Statement 3 Director s Review Report 4 Statement of Assets And Liabilities 6 Income Statement 7 Distribution Statement 8 Statement of Movement In Unit Holders' Funds 9 Cash Flow Statement 10 Notes To The Financial Statements 11 4

3 FUND INFORMATION Management Company Faysal Asset Management Limited Board of Directors of the Management Company Mr. Farook Bengali, Chairman Mr. Ahsan Raza Durrani, Chief Executive Officer Mr. Hassan Mohamed Mahmood, Director Mr. Mohammad Iqbal, Director Mr. Ajaz Rahim, Director Mr. Feroz Rizvi, Director Mr. Iqbal Alimohamed, Director Mr. Aqeel Karim Dhedhi, Director CFO of the Management Company Mr. Muhammad Shakeel Musani Company Secretary of the Management Company Mr. M. Siddique Memon Audit Committee Mr. Iqbal Alimohamed, Chairman Mr. Mohammad Iqbal, Member Mr. Ajaz Rahim, Member Mr. Feroz Rizvi, Member Trustee Central Depository Company of Pakistan Limited 8th Floor, Karachi Stock Exchange Building, Stock Exchange Road, Karachi Bankers to the Fund Faysal Bank Limited Muslim Commercial Bank Limited Bank Alfalah Limited Auditors Ford Rhodes Sidat Hyder & Co., Chartered Accountants Legal Advisor Bawaney and Partners 404, 4 th floor Beaumont Plaza, Beaumont Road Karachi. Registrars Gangjees Registrar Services (Pvt) Limited. Room # 506, 5th Floor, Clifton Center, Kehkashan Clifton - Karachi. Distributors Faysal Asset Management Limited Faysal Bank Limited AKD Securities (Private) Limited PICIC Commercial Bank Limited Invest Capital & Securities My Bank Limited 2

4 MISSION STATEMENT FBGF endeavors to provide investors with an opportunity to earn income and long-term capital appreciation by investing in a large pool of funds representing equity / non equity nvestments in a broad range of sectors and financial instruments. 3

5 DIRECTOR S REVIEW REPORT The Board of Directors of the Faysal Asset Management Limited, the management company of the Faysal Balanced Growth Fund (FBGF), is pleased to present the un-audited accounts of FBGF for the quarter and nine months ended March 31, PERFORMANCE REVIEW Quarter Nine Quarter Nine March 31, Months March 31, Months 2006 ended 2005 ended Rupees in million Total Income Operating Expenses Profit Before Tax Taxation (3.28) Profit After Tax Earnings per Unit - Rs The Profit After Tax (PAT) for the quarter amounted to Rs million compared to PAT of the same quarter of last year which amounted to Rs million. PAT for the current quarter includes realized gain of Rs million whereas there was a realized gain of Rs million during the same quarter last year. During the quarter under review the Fund has not invested in COT/CFS whereas last year the fund earned Rs million during the same quarter. Alternatively, in view of its exposure in listed rated Term Finance Certificates and bank deposits, the fund has earned during the current quarter an amount of Rs million and Rs million, respectively. Accordingly, the Operating Expenses of the Fund have reduced by over Rs million during the current quarter compared to same quarter last year. This reduction mainly includes reduction in brokerage charges, due to the fact that fund has not invested in COT/ CFS during the current quarter. The Fund has maintained its equity allocation at 58% as compared to last year. Though being a balanced fund, the Fund's Net Asset Value (NAV) does not directly correlate to the KSE Index, however, in view of the investment strategy, the Fund has grown during the current quarter with KSE Index as the results are reflected below: 30 June March 2006 Change KSE Index % FBGF NAV (ex-bonus) Rs Rs % * * Represents Gross change after distributing 20% interim bonus (i.e. Rs 20/- per unit) in the financial year

6 INVESTMENTS As of 31 March 2006, the total assets of the Fund were invested as below: FBGF Asset Allocation 22% 20% 58% Equity Fixed Income Cash & Cash Equivalents INCOME DISTRIBUTION In accordance with Board of Directors approval, the fund has distributed 20% bonus to its unit holders during the current period under review. ACKNOWLEDGEMENT The Board of Directors of the Management Company thanks the unit holders for their confidence in the Management, the Securities and Exchange Commission of Pakistan for its valuable support, assistance and guidance. The Board also thanks the employees of the Management Company and the Trustee for their dedication and hard work. For and on behalf of the Board Karachi: April 20, 2006 Ahsan Raza Durrani Chief Executive Officer 5

7 STATEMENT OF ASSETS AND LIABILITIES AS AT MARCH 31, 2006 Assets March 31, June 30, Note Rupees Rupees (Un-audited) (Audited) Bank balances in deposit accounts 437,186, ,210,681 Receivables 4 70,576,800 31,780,917 Investments 5 1,784,728,254 1,597,523,641 Preliminary expenses and floatation costs 6 1,580,824 1,954,796 Total assets 2,294,072,426 1,863,470,035 Liabilities Remuneration payable to the Management Company 4,233,436 3,249,229 Remuneration payable to the Trustee 273, ,646 Creditors, accrued and other liabilities 7 5,911,498 98,639,517 Total liabilities 10,418, ,115,392 Commitments - - Net assets 2,283,654,408 1,761,354,643 Unit holders' funds (as per statement attached) 2,283,654,408 1,761,354,643 Number of Units in issue 18,449,646 15,600,587 Net Asset Value per unit - Rupees The annexed notes 1 to 10 form an integral part of these financial statements. For Faysal Asset Management Limited (Management Company) Ahsan Raza Durrani Ajaz Rahim Iqbal Alimohamed Chief Executive Officer Director Director 6

8 INCOME STATEMENT FOR THE QUARTER AND NINE MONTHS (UNAUDITED) Income Nine Months ended Quarter ended March March March March 31, , , , 2005 Note (Restated) (Restated) Rupees Net gain on sale of held-for-trading investments 537,503, ,174, ,114, ,159,640 Income from reverse repurchase transactions of listed securities - 82,364,240-26,133,282 Profit earned on Term Finance Certificates 46,815,749 18,556,413 12,930,361 9,352,216 Dividend income 27,440,520 28,525,080 9,510,960 6,420,000 Return on bank balances 17,471,134 1,787,302 12,826, ,865 Element of gain /(loss) and capital gain /(losses) in prices of units sold less those in units redeemed 14,089,449 (20,653,199) 25,985,669 (20,484,912) Other income 200, ,520, ,754, ,368, ,188,091 Unrealized gain / (loss)on held-for-trading investments ,988,224 (173,782,598) (14,895,600) (192,161,137) 793,508, ,971, ,472, ,026,954 Expenses Remuneration of the Management Company 33,903,983 32,715,650 12,260,108 10,967,286 Remuneration of the Trustee 2,257,516 2,204, , ,989 Brokerage and settlement charges 5,724,651 28,904,728 2,586,939 14,853,259 Bank charges 8,093 29,975 1,125 6,900 Auditors' remuneration 240, ,871 81, ,033 Legal and professional charges 126, Annual fee to Securities & Exchange Commission of Pakistan 1,506,848 1,453, , ,413 Listing fee 293,503 33, Amortization of preliminary expenses and floatation costs 6 373, , , ,288 44,435,649 66,025,179 16,389,599 27,291, ,073, ,946, ,082, ,735,786 Provision for taxation - 3,279, Net income for the period 749,073, ,225, ,082, ,735,786 Earnings per Unit The annexed notes 1 to 10 form an integral part of these financial statements. For Faysal Asset Management Limited (Management Company) Ahsan Raza Durrani Ajaz Rahim Iqbal Alimohamed Chief Executive Officer Director Director 7

9 DISTRIBUTION STATEMENT FOR THE PERIOD (UNAUDITED) March 31, March 31, Rupees Rupees Undistributed income / (loss) as at July 1 6,288,573 (31,917,211) Net income for the period 749,073, ,225, ,361, ,308,711 Distribution - Interim 20% (i.e. Rs 20/ per unit) Units issued in March 2006 (316,672,053) - Undistributed income carried forward 438,689, ,308,711 The annexed notes 1 to 10 form an integral part of these financial statements. For Faysal Asset Management Limited (Management Company) Ahsan Raza Durrani Ajaz Rahim Iqbal Alimohamed Chief Executive Officer Director Director 8

10 STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUNDS FOR THE PERIOD (UN-AUDITED) March 31, March 31, Rupees Rupees Net assets at the beginning of the period - July 01, 1,761,354,643 1,998,296,419 Amounts received on issue of 6,166,792 Units (March 2005: 288,860 units) 206,985,641 31,667,422 Amounts paid on redemption of 3,317,733 Units (March 2005: 3,861,878 units) (419,669,682) (409,622,321) (212,684,041) (377,954,899) Element of (income) / loss and capital (gain) / losses included in prices of units sold less those in units redeemed (14,089,449) 20,653,199 Net profit for the period 749,073, ,255,922 Net assets as at the end of the period 2,283,654,408 1,948,220,641 Net assets as at the end of the period consist of: Capital account 1,844,964,633 1,672,911,930 Undistributed income carried forward 438,689, ,308,711 2,283,654,408 1,948,220,641 The annexed notes 1 to 10 form an integral part of these financial statements. For Faysal Asset Management Limited (Management Company) Ahsan Raza Durrani Ajaz Rahim Iqbal Alimohamed Chief Executive Officer Director Director 9

11 CASH FLOW STATEMENT FOR THE PERIOD (UNAUDITED) March 31, March 31, Rupees Rupees (Restated) Cash flow from operating activities Net income for the period 749,073, ,946,271 Adjustments for: Net gain on sale of "Held-for-trading" investments (537,503,827) (433,174,212) Unrealized gain / (loss) on "Held-for-trading" investments (149,988,224) 173,782,597 Element of (gain) / loss and capital (gain) / losses in prices of units sold less those in units redeemed (14,089,449) 20,653,199 Amortization of preliminary expenses and floatation costs 373, ,342 47,865,726 65,583,197 (Increase) / decrease in assets Receivables (excluding advance taxation) (38,918,615) 1,123,003,920 Advance against purchase of term finance certificates - 47,500,000 Advance against purchase of preference shares - (65,000,000) (38,918,615) 1,105,503,920 Increase / (decrease) in liabilities Creditors, accrued and other liabilities (92,728,019) 2,223,380 Remuneration payable to the Management Company 984, ,704 Remuneration payable to the Trustee 46,439 15,307 (91,697,374) 2,521,391 Net cash (outflow) / inflow from operating activities (82,750,263) 1,173,608,508 Cash flow from investing activities Sale of investments 3,625,126,919 9,876,094,300 Purchase of investments (3,124,839,481) (10,695,074,409) Advance tax refund / (paid) 122,733 (2,423,301) Net cash inflow / (outflow) from investing activities 500,410,171 (821,403,410) Cash flow from financing activities Amounts received on issue of units 206,985,641 31,667,422 Payments against redemption of units (419,669,682) (409,622,321) Net cash outflow from financing activities (212,684,041) (377,954,899) Net increase /(decrease) in bank balances during the period 204,975,867 (25,749,801) Balance with banks at the beginning of the period 232,210, ,734,050 Balance with banks at the end of the period 437,186,548 88,984,249 The annexed notes 1 to 10 form an integral part of these financial statements. For Faysal Asset Management Limited (Management Company) Ahsan Raza Durrani Ajaz Rahim Iqbal Alimohamed Chief Executive Officer Director Director 10

12 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD (UNAUDITED) 1. LEGAL STATUS AND NATURE OF BUSINESS Faysal Balanced Growth Fund (the Fund) has been established under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (the NBFC Rules) and has been authorized as a unit trust scheme by the Securities and Exchange Commission of Pakistan (SECP) on February 18, It has been constituted under a Trust Deed, dated January 29, 2004, between Faysal Asset Management Limited, a company incorporated under the Companies Ordinance, 1984 and Central Depository Company of Pakistan Limited (CDC) as the Trustee, also incorporated under the Companies Ordinance, The Fund is an open ended balanced mutual fund and offers units for public subscription on a continuous basis. The units are transferable and can also be redeemed by surrendering them to the Fund. The units are listed on the Karachi Stock Exchange. The principal activity of the Fund is to make investments in equity market and fixed income securities including money market instruments. 2. BASIS OF PRESENTATION These financial statements have been prepared in accordance with the requirements of the International Accounting Standard - 34: Interim Financial Reporting as applicable in Pakistan, Trust Deed and the Non-Banking Finance Companies (Establishment and Regulation) Rules, ACCOUNTING POLICIES The accounting policies followed for the preparation of these financial statements are the same as those applied in preparing the financial statements of the Fund for the year ended June 30, 2005, except for the change as stated below: Consequent to revision in International Accounting Standard (IAS) 39; "Financial Instruments Recognition and Measurement" the Fund has changed its accounting policy pertaining to transaction costs incurred in acquisition of investments. Now investments classified as held for trading, which are measured at fair value through profit or loss, acquisition charges are charged to the profit and loss account when incurred. Previously such charges incurred on acquisition of all class of investments were included in the cost. This change in the accounting policy has been accounted for retrospectively and comparative information has been restated in accordance with the treatment specified in IAS 8; "Accounting Policies, Changes in Accounting Estimates and Errors". There is no financial impact of the above change in policy on net income and net assets of the Fund of either the current period or any of the prior periods. The effect of the change in policy to the line items appearing in the income statement is as follows: 11

13 Increase / (decrease) of profit and loss items due to change in IAS-39 Nine Months ended Quarter ended March March March March 31, , , , Rupees Net (loss) / gain on sale of held-for-trading investments 1,312,821 8,419,059 1,352,547 6,348,324 Unrealized gain / (loss) on held-for-trading investments 1,333,843 1,132,990 (70,132) 22,292 Brokerage and settlement charges 2,646,664 9,552,049 1,282,415 6,370,616 Net effect RECEIVABLES - considered good March 31, June 30, Note Rupees Rupees (Un-audited) (Audited) Against sale of held-for-trading investments 46,377,497 10,984,023 Dividend receivable 6,698,320 3,992,270 Mark-up receivable on Term Finance Certificates 9,075,292 14,540,076 Return receivable on bank balances 6,649, ,388 Advance tax 1,736,410 1,859,143 Prepaid settlement charges 39,386 94,018 70,576,800 31,780, INVESTMENTS At fair value through profit or loss - Held-for-trading Listed equity securities 5.1 1,336,300, ,217,844 Listed debt securities ,427, ,341,208 1,784,728,254 1,495,559,052 Unlisted debt securities - 101,964,589 1,784,728,254 1,597,523,641 12

14 At the beginning Acquired Bonus / right Disposed Market value of period during the shares received during the At the end of (Rupees) % of period during the period period the period net assets No. of holdings 5.1 Listed equity securities Ordinary share having a face value of Rs. 10/- each Cement D.G. Khan Cement Limited - 2,439,700-2,439, Fauji Cement Company Limited 650, , Lucky Cement Limited 468, ,000-1,018, Maple Leaf Cement Limited 300,000 1,858,050-2,158, Insurance Companies Adamjee Insurance Company Ltd 1,000,000 39,300-1,039, Commercial Banks Askari Commercial Bank Limited 120,000 10, , Bank Al Falah Limited 495, , , , ,650 37,326, % Muslim Commercial Bank Limited 400,000 1,920,400-2,320, National Bank of Pakistan - 2,400,000-2,400, NIB Bank 200,000 47, , ,734 2,994, % PICIC Commercial Bank - 60,500-60, Union Bank Limited 200, , Chemicals ICI Pakistan Limited 768, ,600-1,123, ,200 47,717, % Investment Banks First Dawood Investment Bank Limited 5, , Jahangir Siddiqui Investment Bank Limited - 160, , Oil & Gas Marketing Companies Attock Petroleum Limited - 5, ,000 1,750, % Pakistan State Oil Company Limited 253, , , ,000 37,300, % Sui Northern Gas Pipelines Company Limited 100, , Sui Southern Gas Company Limited 300, , ,000 33,000, % Oil & Gas Exploration Companies Pakistan Oil Fields Limited 95,200 1,084, , , ,412, % Oil and Gas Development Corporation 447,700 3,256,000-3,003, , ,320, % Pakistan Petroleum Limited 850, , , , ,740, % Fertilizer Fauji Fertilizer Bin Qasim Limited 500,000 2,273,500-1,500,000 1,273,500 54,187, % Engro Chemical Pakistan Limited 349, , Fauji Fertilizer Limited - 715, , Closed Ended Funds PICIC Growth Fund - 100, , Synthetic and Rayan Dewan Salman Fibers Limited 700, , ,000 14,085, % Textile Composite Artistic Denim Mills - 15,700-4,200 11,500 2,461, % Azgard Nine Limited 1,135, ,135,000 50,053, % Kohinoor Textile 8, , Nagina Cotton Mills Limited 71, ,000 1,625, % Nishat Chunian Limited 84,400 9,000 9, ,

15 Textile Spinning At the beginning Acquired Bonus / right Disposed Market value of period during the shares received during the At the end of (Rupees) % of period during the period period the period net assets No. of holdings Dewan Farooq Spinning Mills Limited 1,500, , ,000 4,692, % Nishat Mills Limited - 1,534, ,100 1,291, ,462, % Refineries National Refinery Limited 52, , Attock Refinery Limited - 50,000-50, Modaraba First Habib Modaraba 424, ,000 3,243, % Paper & Board Packages Limited 12, ,220 2,553, % Cable & Electric Goods Pak Electron Limited 362,710 54, ,116 50,000 3,362, % Glass & Ceramics Tariq Glass Industries Limited - 13, , , % Sugar and Allied Industries Tandianwala Sugar Mills Limited - 50,000-30,000 20, , % Technology and Communication Callmate Telips 592, , Pakistan Telecommunications Company Limited 1,905,000 3,550,000-2,255,000 3,200, ,080, % Telecard Limited 1,593, ,500-1,700, ,942,400 25,510, ,490 28,802,876 12,817,904 1,286,300, % Preference share having a face value of Rs.10/- each Cable and Electric Goods Pak Electron Limited 5,000, ,000,000 50,000, % 5,000, ,000,000 50,000, % 20,942,400 25,510, ,490 28,802,876 17,817,904 1,336,300, % 14

16 5.2 Listed debt securities At the beginning Acquired Disposed At the end of Fair value of period during the during the the period (Rupees) % of period period net assets No. of holdings These TFCs having a face value of Rs. 5,000/- each. Commercial Banks United Bank Limited(1st issue) 25, , ,172, % United Bank Limited (2nd issue) 5, ,000 23,529, % Investment Companies Jahangir Siddiqui & Company Limited 7, ,650 35,222, % Oil & Gas Exploration Companies Chanda Oil and Gas Securitization Company 28,000 - (8,000) 20,000 93,382, % Naimat Basal Oil and Gas Securitization Company 15, ,000 66,012, % Leasing Companies Trust Leasing Company Limited 4, ,500 15,169, % Technology and Communication Tele Card Limited 20, ,000 99,938, % 105,150 - (8,000) 97, ,427, % 5.2.1As disclosed in accounting policy 4.1 to the annual financial statements for the year ended June 30, 2005, TFCs, both listed and unlisted, are valued based on discounted cash flow method as allowed by IAS-39. However, the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 require listed securities to be valued on the basis of the closing rate of the stock exchange on which the same are listed and unlisted to be valued at the investment price. Had these been valued on the basis required by the NBFC Rules, the carrying value of investments and net income for the period would have been higher by Rs. 37,322,258/-. Further, the Net Asset Value (NAV) of the Fund during the period may also have been lower or higher based on the prevailing stock exchange rates and as such there may be differences in the "element of loss and capital losses in prices of units sold less those of units redeemed" accordingly. The impact of the method used by the Fund on the number of units issued / redeemed during the period as well as the "element of loss and capital losses in prices of units sold less those in units redeemed" is not quantifiable and considered immaterial as difference between the value of TFCs using closing rate of the stock exchange and carrying value of TFCs based on discounted cash flow method form less than 1.63% of the NAV at the period end. Rupees 5.3 Cost of held-for-trading investments as at March 31, ,669,812,992 Cost of held-for-trading investments as at June 30, 2005 (Restated) 1,748,302,391 15

17 March 31, June 30, Rupees Rupees (Un-audited) (Audited) 5.4 Net unrealized gain / (loss) during the period in the value of investments classified as 'Held-for-trading' (Restated) Fair value of investments classified as 'Held-for-trading' 1,784,728,254 1,597,523,641 Less: Cost of investments classified as 'Held-for-trading' 1,669,812,992 1,748,302, ,915,262 (150,778,750) Net unrealized loss in fair value of investments classified as 'Held-for-trading' at the beginning of the period 150,778,750 28,628,975 Less: Realised on disposal during the period 115,705,788 28,493,575 35,072, , ,988,224 (150,643,350) 6. PRELIMINARY EXPENSES AND FLOATATION COSTS Balance at the beginning of the period 1,954,796 2,454,795 Less: Amortization during the period 373, ,999 Balance at the end of the period 1,580,824 1,954, CREDITORS, ACCRUED AND OTHER LIABILITIES 7.1 Includes Rs. Nil (June 2005: 95.1 million) payable in respect of purchase of held-for-trading investments. 8. TRANSACTIONS WITH CONNECTED PERSONS Faysal Asset Management Limited Remuneration of the Management Company 33,903,983 42,885,730 Sales load 4,041, ,973 Faysal Bank Limited Issue of Units 371,583 - Profit on deposit account 4,674,687 2,305,831 Aqeel Karim Dhedhi Securities (Private) Limited Brokerage fee - 2,825,785 Purchase of marketable securities - 2,353,881,336 Sale of marketable securities - 1,476,762,890 Profit on money market transactions - 3,800,827 Listed equity securities purchased under resale commitment - 12,515,861,485 Listed equity securities purchased under resale commitment matured - 12,518,597, DATE OF AUTHORISATION FOR ISSUE These financial statements were authorized for issue by Board of Directors of Management Company on April 20, GENERAL 10.1 Corresponding figures have been re-arranged and re-classified wherever necessary, for the purpose of comparison Figures have been rounded off to the nearest rupee. For Faysal Asset Management Limited (Management Company) Ahsan Raza Durrani Ajaz Rahim Iqbal Alimohamed Chief Executive Officer Director Director 16