annual report 2006 - js investmentsmr. muhammad arshad 04 0 mian raza mansha 01 0 mr. aftab ahmed...

BSJS Balanced Fund Limitedannual report 2006

CONTENTS

Vision and Mission Statement 01

Organization 02

Directors' Report 03

Performance Table / Key Financial Data 07

Statement of Compliance with the Code of Corporate Governance 10

Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance 12

Auditor's Report 13

Financial Statements 15

Balance Sheet 17

Income Statement 18

Cash Flow Statement 19

Statement of Changes in Equity 20

Distribution Statement 21

Statement of Movement in Equity and Reserves ‘Per Share’ 22

Notes to the Financial Statements 23

Statement of Income & Expenditure of Investment Adviserin relation to the Fund 38

Pattern of Shareholding 39

Branch Network 41

Notice of Meeting 42

Form of Proxy

Annual report 2006 | 1BSJS Balanced Fund Limited

To be Industry Leaders in Financial Services

mission

vision

core values

Pursuit of Professional Excellence

Shareholder Value Integrity Commitment

ORGANIZATION

Investment AdviserJS ABAMCO Limited(Formerly ABAMCO Limited)7th Floor, The Forum, G-20Khayaban-e-Jami, Block-9, CliftonKarachi-75600Tel: (92-21) 111-222-626Fax: (92-21) 5361724E-mail:[email protected]: www.abamco.com

Board of DirectorsShamshad Nabi ChairmanMuhammad Najam Ali Chief Executive OfficerMunawar Alam SiddiquiMuhammad Yousaf AmanullahAli Hassan HamadaniMuhammad ArshadAftab Ahmed Khan

Chief Financial Officer &Company SecretarySuleman Lalani

Audit CommitteeShamshad Nabi ChairmanMuhammad Yousaf Amanullah MemberMunawar Alam Siddiqui Member

CustodianMCB Bank Ltd.MCB Tower, I. I. Chundrigar Road, Karachi.

AuditorsFord Rhodes Sidat Hyder & CompanyChartered AccountantsProgressive Plaza, Beaumont Road,P. O. Box No. 15541Karachi-75530

Legal AdviserBawaney & PartnersRoom No. 404, 4th floor,Beaumont Plaza,Beaumont Road, Civil Lines Karachi-75530.

BankersSaudi Pak Commercial BankMCB Bank LimitedSoneri Bank LimitedThe Bank of PunjabMetropolitan Bank LimitedBank Al-Habib Limited Mybank LimitedNIB Bank Limited

Share RegistrarTechnology Trade (Private) Limited241-C, Block 2, P.E.C.H.S, KarachiTel: (92-21) 4391316-7Fax: (92-21) 4391318

2| Annual report 2006BSJS Balanced Fund Limited

DIRECTORS REPORT TO THE SHARE HOLDERS

The Board of Directors of BSJS Balanced Fund Limited presents its twelfth Annual Reporttogether with the audited financial statements for the year ended June 30, 2006.

1. Market Outlook

The KSE 100 Index closed at 9989.41 on June 30, 2006 compared to 7450.12 on June 30,2005 - an increase of 34% during the year. The KSE 100 Index reached the highest everlevel of 12,273.77 on April 17, 2006. Market capitalization increased to Rs. 2,801.182billion as on June 30, 2006 as against Rs. 2,068.187 billion on June 30, 2005 showing animpressive increase of 35% during the year.

The market remained highly volatile between March and June 2006. The Budget 2006-07 doubled the Capital Value Tax on share purchases to 0.02% and Withholding Tax onsale of shares to 0.01% from 0.005%. These measures led to a negative market sentimentin the short term however, their long term impact will become clear in the followingmonths. At the same time, tax exemption for mutual funds on income from CFSfinancing was proposed to be withdrawn in the Finance Bill 2006; however this clausehas been subsequently removed in the Finance Act 2006. The deadline for thedemutualization of bourses was extended to December 2006.

Significant progress was made on the privatization front as the much awaitedprivatization of Pakistan Telecommunication Corporation Limited (PTCL) and KarachiElectric Supply Corporation (KESC) were completed. On the flip side, the SupremeCourt (SC) cancelled Pakistan Steel Mills (PSM) sell-off citing certain irregularities inthe privatization process. We are optimistic that the apex Court's ruling will not alterthe privatization plans of the government.

The SBP kept a firm hand on interest rates and controlled supply side bottle necks in itsbid to fight against inflation. In view of rising international oil prices and Pakistan'sgrowing machinery demand for its large scale manufacturing sector, the country'strade deficit may suffer further which in turn will put pressure on the exchange rate.As a result, going forward the central bank may opt for further tightening of themonetary policy by raising interest rates. However, this may come about at a measuredpace so as to ensure that economic growth and capacity expansion along with domesticdemand are not stifled too much.

Based on the given scenario, we remain optimistic on how the future economic cyclewill develop and look forward to provide the best investment solutions to the investors.

2. Fund Performance

The net assets of the Fund as on June 30, 2006 were Rs. 1.789 billion compared to Rs.1.621 billion on June 30, 2005. The Fund has paid two interim dividends @ 1.75 and Rs.1.25 per share respectively or Rs. 3.00 per share making the total dividend payout of Rs.355.725 million during the year. The increase in net assets including the dividend paidcomes to Rs. 524.122 million or 32.3%. A balanced fund is usually supposed toappreciate less than an all stock fund in the bull market; BSJS Balanced Fund recordeda fabulous gain of 32.3%, which is at par with the return on an equity fund with muchlower risk profile as a balanced fund.


Investment in listed equity securities stood at Rs. 1.525 billion as on June 30, 2006 whichwas 85% of the net assets. Sector wise allocation of significant investments in equitysecurities is presented below:

Realized income for the year ended June 30, 2006 was Rs. 438.812 million comprising ofcapital gains on sale of investment of Rs. 344.435 million, dividend income of Rs. 33.954million, return on bank deposits of Rs. 32.586 million and other income of Rs. 27.836million. Total operating expenses for the year were Rs. 53.748 million. Income for the yearended June 30, 2006 including unrealized gain on investments was Rs. 524.437 million,which works out to Rs. 4.42 per share compared to Rs. 1.24 for the year ended June 30, 2005.

The Fund has already paid Rs. 3.00 (30%) per share as interim dividends during the year.The interim dividend of Rs. 355.725 million comes to 92% of the total realized incomeincluding the realized capital gain. As this dividend is more than 90% of its net income forthe year excluding realized capital gains; therefore, the income of the Fund will not besubject to income tax under Clause 99 of Part 1 of the 2nd Schedule of the Tax Ordinance,2001.

Non-Banking Finance Companies (Establishment & Regulation Rules, 2003 provides that"a security listed on a stock exchange shall be valued at its last sale price on such exchangeon the date on which it is valued or if such exchange is not open on such date, then at itslast sale price on the next preceding date on which such exchange was open and if no saleis reported for such date the security shall be valued at an amount neither higher than theclosing asked price nor lower than the closing bid price";. TFCs quoted on the stockexchange are neither actively traded on the exchange nor the quotes available are indicativeof fair value of the underlying security. According to the guidelines of IAS-39, to reflect thereliable measure of fair value to Term Finance Certificates, the Investment Adviser hasadopted policy of valuation of TFCs based on the average quotes available from reputablebrokerage houses dealing in money market transactions.

3. Investment Strategy

The investment strategy devised for BSJS Balanced Fund Limited aims to diversify investorinterests across equity securities, debt instruments and short term placements, therebyproviding our share holders with a balanced exposure. The fund's strategy aims at not onlypreserving investors' capital but also maximizing the value of their investments whileproviding a stable stream of income.

4 | Annual report 2006BSJS Balanced Fund Limited

Sector Amount - Rs. in millions % of net assetsCommercial Banks 320.677 17.9%Oil & Gas Exploration 271.414 15.1%Insurance 202.350 11.3%Cement 136.994 7.65%

4. Fund and Investment Adviser Rating

The Pakistan Credit Rating Agency (PACRA) has assigned a 4-Star fund rating (Category:Balanced Fund) to BSJS Balanced Fund Limited (BBF), which reflects a good performancerelative to its peer. The rating is a composite measure of two factors namely a) returns, andb) risk associated with the returns measured by Sharpe Ratio.

Pakistan Credit Rating Agency (PACRA) has awarded an AM2 asset management rating toJS ABAMCO Limited (formerly ABAMCO Limited) on February 15th 2006, which reflectsour strong capacity to manage the risks inherent in asset management and to meet veryhigh standards and benchmarks.

5. Compliance

The Board of Directors of BSJS Balanced Fund Limited states that:

a. The financial statements, prepared by the management, present fairly the state of affairs ofthe Fund, the results of its operations, cash flows and movement in net assets of the Fund.

b. Proper books of accounts of the Fund have been maintained.c. Appropriate accounting policies have been consistently applied in preparation of financial

statements, and financial estimates are based on reasonable and prudent judgment.d. International Accounting Standards, as applicable in Pakistan, provisions of the Non-

Banking Finance Companies (Establishment & Regulation) Rules, 2003, and directives ofthe Securities and Exchange Commission of Pakistan have been followed in preparation ofthe financial statements (except as explained above for valuation of TFCs).

e. The system of internal control is sound in design and has been effectively implemented andmonitored.

f. There are no significant doubts upon the Fund's ability to continue as a going concern.g. There has been no material departure from the best practices of the Code of Corporate

Governance, as detailed in the listing regulations.h. A performance table / key financial data is given on page 07 of this annual report.i. The Directors have signed the "Statement of Ethics and Business Practices."j. No shares were traded by the Chief Executive, directors and executives, their spouses and

minor children during the financial year ended June 30, 2006.k. The value of investments of the staff provident fund of JS ABAMCO Limited, the

investment adviser of the company, as per the audited accounts for the year ended June 30,2006 was Rs. 10.127 million.

l. Pattern of Shareholding of the Company as on June 30, 2006 is given on page 39 of thisannual report.

6. Meetings of the Directors

During the year four meetings of the Board of Directors were held. The attendance of eachdirector for these meetings is as follows:


Name Eligible to attend Meetings attendedMr. Munawar Alam Siddiqui 04 03Mr. Muhammad Najam Ali 04 04Mr. Shamshad Nabi 04 04Mr. Muhammad Yousuf Amanullah 04 04Mr. Ali Hassan Hamadani 04 02Mr. Muhammad Arshad 04 0Mian Raza Mansha 01 0Mr. Aftab Ahmed Khan 01 01

7. Auditors

The Fund's external auditors, Messrs. Ford Rhodes Sidat Haider & Co., CharteredAccountants, retire and being eligible have offered themselves for reappointment asauditors for the ensuing year ending June 30, 2007. The Audit Committee of the Board hasrecommended their reappointment as auditors of the Fund for the year ending June 30,2007.

8. Acknowledgment

The Directors expresses their gratitude to the Securities and Exchange Commission ofPakistan for its valuable support, assistance and guidance. The Board also thanks theemployees of the Investment Adviser and the custodian for their dedication and hardwork and the share holders for their confidence in the Management.

Muhammad Najam AliKarachi: July 29, 2006 Chief Executive Officer


PERFORMANCE TABLE / KEY FINANCIAL DATA


YEAR2006 2005 2004 2003 2002 2001 2000 1999 1998 1997

---------------------------------------------------------------------- Rupees ----------------------------------------------------------------------

Net assets 1,789,332,366 1,620,935,652 1,624,589,416 661,901,356 420,177,488 358,863,765 257,468,398 150,189,564 150,122,072 150,160,797

Net assets value per share 15.09 13.67 15.41 19.46 12.35 10.55 10.30 10.01 10.01 10.01

Investments 1,605,223,810 1,034,949,228 999,151,708 630,603,352 263,366,771 122,082,295 125,063,272 109,884,608 76,165,207 70,761,842

Paid-up Capital 1,185,750,000 1,185,750,000 1,054,000,000 340,000,000 340,000,000 340,000,000 250,000,000 150,000,000 150,000,000 150,000,000

Net profit for the year 524,437,347 146,549,197 282,688,060 292,723,868 41,498,144 28,316,007 67,463,873 15,067,492 11,961,275 19,693,766

Earnings per share 4.42 1.24 3.24 7.11 1.22 0.94 2.70 1.01 0.80 1.31

Dividend distribution in percentage Cash 30 12.50 - 15 15 11 31 10 8 13Bonus - - 12.50 10 - - - - - -


STATEMENT OF COMPLIANCE WITH THE CODE OFCORPORATE GOVERNANCEFor the year ended June 30, 2006

This Statement is being presented in compliance with the Code of Corporate Governance('the Code') contained in Regulation 37 of the Listing Regulations of the Karachi StockExchange. The purpose of the Code is to establish a framework of good governance,whereby a listed company is managed in compliance with the best practices of corporategovernance.

BSJS Balanced Fund Limited ('the Company') has applied the principles contained in theCode in the following manner:

1. The Company encourages representation of independent non-executive directors.Presently, the Board includes six non-executive directors.

2. The directors have confirmed that none of them is serving as a director in more thanten listed companies, including this Company.

3. All the directors of the Company are registered as taxpayers and none of them hasdefaulted in payment of any loan to a banking company, a DFI or an NBFI or, beinga member of a stock exchange, has been declared as a defaulter by that stockexchange.

4. During the year under review two casual vacancies occurred in the Board whichwere duly filled in by other directors.

5. JS ABAMCO Limited, the Investment Advisor of the Company has prepared a"Statement of Ethics and Business Practices", which has been signed by all thedirectors of the Company and employees of the Investment Advisor.

6. The Board has developed a vision / mission statement, overall corporate strategyand significant policies of the Company which have been approved by the Board.A complete record of particulars of significant policies along with the dates onwhich they were approved or amended has been maintained.

7. All the powers of the Board have been duly exercised and decisions on materialtransactions, including appointment and determination of remuneration and termsand conditions of employment of the CEO have been taken by the Board. The rolesand responsibilities of the Chairman of the Board of Directors have been ratified bythe Board.

8. The meetings of the Board were presided over by the Chairman, and in his absence,by a director elected by the Board for this purpose and the Board met at least oncein every quarter during the year. Written notices of the meetings of the Board ofDirectors, along with agenda and working papers, were circulated at least sevendays before the meetings. The minutes of the meetings were appropriately recordedand circulated.

9. During the year, directors were apprised of their roles and Asset Managers Code ofProfessional Conduct.

10. During the year, there was no change in the Chief Financial Officer / Company Secretaryand Head of Internal Audit. Their remuneration and terms and conditions ofemployment have been approved by the board.

11. The directors' report has been prepared in compliance with the requirements of the Codeand fully describes the salient matters required to be disclosed.

12. The financial statements of the Company were duly endorsed by the CEO and CFObefore approval of the Board.

13. The directors, CEO and Executives of the Investment Adviser do not hold any interest inthe shares of the Company other than those disclosed in the directors' report.

14. The Company has complied with all the corporate and financial reporting requirementsof the Code with respect to the Company.

15. The Board has formed an Audit Committee comprising of three non-executive directorsincluding the chairman of the Committee. The meetings of the Audit Committee are heldevery quarter prior to approval of interim and annual results of the Company as requiredby the Code. The Board has approved terms of reference of the Audit Committee.

16. The Board of the Investment Advisor has setup an effective internal audit function on fulltime basis.

17. The statutory auditors of the Company have confirmed that they have been given asatisfactory rating under the quality control review program of the Institute of CharteredAccountants of Pakistan, that they or any of the partners of the firm, their spouses andminor children do not hold Shares of the Company and that the firm and all its partnersare in compliance with International Federation of Accountants (IFAC) guidelines onCode of Ethics as adopted by the Institute of Chartered Accountants of Pakistan.

18. The statutory auditors or the persons associated with them have not been appointed toprovide other services except in accordance with the listing regulations and the auditorshave confirmed that they have observed IFAC guidelines in this regard.

19. We confirm that all other material principles contained in the Code have been compliedwith.

Muhammad Najam AliKarachi: July 29, 2006 Chief Executive Officer



REVIEW REPORT TO THE MEMBERSON STATEMENT OF COMPLIANCE WITH BESTPRACTICES OF CODE OF CORPORATE GOVERNANCE

We have reviewed the Statement of Compliance with the best practices contained in theCode of Corporate Governance prepared by the Board of Directors of BSJS Balanced FundLimited to comply with the Listing Regulations No. 37 (Chapter XI) of the Karachi StockExchange, where the Company is listed.

The responsibility for compliance with the Code of Corporate Governance is that of theBoard of Directors of the Company. Our responsibility is to review, to the extent wheresuch compliance can be objectively verified, whether the Statement of Compliance reflectsthe status of the Company's compliance with the provisions of the Code of CorporateGovernance and report if it does not. A review is limited primarily to inquiries of theCompany's personnel and review of various documents prepared by the Company tocomply with the Code.

As part of our audit of financial statements, we are required to obtain an understanding ofthe accounting and internal control systems sufficient to plan the audit and develop aneffective audit approach. We have not carried out any special review of the internal controlsystem to enable us to express an opinion as to whether the Board's statement on internalcontrol covers all controls and the effectiveness of such internal controls.

Based on our review, nothing has come to our attention which causes us to believe that theStatement of Compliance does not appropriately reflect the Company's compliance, in allmaterial respects, with the best practices contained in the Code of Corporate Governancefor the year ended June 30, 2006.

Ford Rhodes Sidat Hyder & Co.Karachi Chartered AccountantsDate: July 29, 2006

AUDITORS' REPORT TO THE SHARE HOLDERS

We have audited the annexed balance sheet of BSJS Balanced Fund Limited (theCompany) as at June 30, 2006 and the related profit and loss account, cash flow statement,statement of changes in equity, distribution statement and statement of movement inequity and reserves per share, together with the notes forming part thereof, for the yearthen ended and we state that we have obtained all the information and explanationswhich, to the best of our knowledge and belief, were necessary for the purposes of ouraudit.

It is the responsibility of the Company's management to establish and maintain a systemof internal control and prepare and present the above said statements in conformity withthe approved accounting standards, the requirements of the Companies Ordinance, 1984and the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003.Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable inPakistan. These standards require that we plan and perform the audit to obtain reasonableassurance about whether the above said statements are free of any material misstatement.An audit includes examining on test basis, evidence supporting the amounts anddisclosures in the above said statements. An audit also includes assessing the accountingpolicies and significant estimates made by management, as well as, evaluating the overallpresentation of the above said statements. We believe that our audit provides a reasonablebasis for our opinion and after due verification, we report that;

a) as referred to in notes 4.2 and 7.5.5 to the financial statements, the Company has apolicy to value its investments in quoted Term Finance Certificates (TFCs) based onbrokers' quotations instead of the stock exchange closing price as required by Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, resultingin understatement of net assets and equity as of June 30, 2006 by Rs. 842,116/-;

b) in our opinion, proper books of account have been kept by the Company as requiredby the Companies Ordinance, 1984 and the Non-Banking Finance Companies(Establishment and Regulation) Rules, 2003;

c) in our opinion;

(i) the balance sheet and profit and loss account together with the notes thereonhave been drawn up in conformity with the Companies Ordinance, 1984 andexcept for as stated in paragraph (a) above, The Non-Banking FinanceCompanies (Establishment and Regulation) Rules, 2003 and are in agreementwith the books of accounts and are further in accordance with accountingpolicies consistently applied, except for the changes as stated in note 4.1 to thefinancial statements with which we concur;

(ii) the expenditure incurred during the year was for the purpose of theCompany's business; and

(iii) the business conducted, investments made and the expenditure incurredduring the year were in accordance with the objects of the Company;



d) except for the effect of the matter stated in paragraph (a) above, in our opinion andto the best of our information and according to the explanations given to us, thebalance sheet, profit and loss account, cash flow statement, statement of changes inequity, the distribution statement and statement of movement in equity and reservesper share, together with the notes forming part thereof confirm with approvedaccounting standards as applicable in Pakistan, and give the information required bythe Companies Ordinance, 1984, the Non-Banking Finance Companies(Establishment and Regulation) Rules, 2003 in the manner so required andrespectively give a true and fair view of the state of Company's affairs as at June 30,2006 and of the profit, cash flows, changes in equity and undistributed income andmovement in equity and reserves per share for the year then ended; and

e) in our opinion Zakat deductible at source under the Zakat & Ushr Ordinance 1980(XVIII of 1980), was deducted by the Company and deposited in the Central ZakatFund established under section 7 of that ordinance.

Ford Rhodes Sidat Hyder & Co.Karachi Chartered AccountantsDate: 29 July 2006


FINANCIAL STATEMENTS


CONTENTS

Balance Sheet 17

Income Statement 18

Cash Flow Statement 19

Statement of Changes in Equity 20

Distribution Statement 21

Statement of Movement in Equity and Reserves ‘Per Share’ 22

Notes to the Financial Statements 23

BALANCE SHEETAs At June 30, 2006

Annual report 2006 |17BSJS Balanced Fund Limited

Note 2006 2005 ------- Rupees -------

(Restated)ASSETS

NON-CURRENT ASSETS

Security deposits 5 1,137,500 1,137,500

CURRENT ASSETS

Due from broker - considered good 6 7,770,979 9,625,383 Investments 7 1,605,223,810 1,034,949,228Receivable against reverse repurchase

transactions of listed equity securities - 110,374,175 Accrued mark-up / return 8 3,045,646 1,583,203 Dividend receivable 4,691,026 150,000 Other receivable 9 1,169,087 1,248,900 Bank balances 10 217,140,485 543,106,331

1,839,041,033 1,701,037,220 TOTAL ASSETS 1,840,178,533 1,702,174,720

LIABILITIES

CURRENT LIABILITIES

Remuneration payable to the investment adviser 11 37,481,372 32,760,234 Remuneration payable to the custodian 12 379,730 1,712,897 Trade payables and other liabilities 13 2,170,538 41,538,624 Dividend payable 10,814,527 5,227,313

TOTAL LIABILITIES 50,846,167 81,239,068

NET ASSETS 1,789,332,366 1,620,935,652

SHARE CAPITAL AND RESERVES

Authorised capital150,000,000 (2005: 150,000,000) ordinary shares

of Rs. 10/- each 1,500,000,000 1,500,000,000

Issued, subscribed and paid-up capital 14 1,185,750,000 1,185,750,000

Capital reserve 15 10,000,000 10,000,000Unrealised appreciation / (diminution) in the value of

available-for-sale investments 334,268 649,901 Unappropriated profit 593,248,098 424,535,751

1,789,332,366 1,620,935,652

The annexed notes 1 to 26 form an integral part of these financial statements.

Muhammad Najam Ali Shamshad Nabi Munwar Alam Siddiqui Chief Executive Chairman Director

INCOME STATEMENTFor the year ended June, 30 2006


Note 2006 2005 ------- Rupees -------

(Restated)INCOME

Net gain on sale of marketable securities 344,435,118 229,580,948 Unrealised gain / (loss) on held-for-trading investments 139,373,204 (129,220,511)

Net gain on marketable securities 483,808,322 100,360,437

Dividend income 33,954,414 50,061,448 Income from reverse repurchase transactions

of listed equity securities 23,763,980 31,456,534 Mark-up on term finance certificates 3,969,655 3,826,388 Mark-up on government securities 23,794 1,706,156 Return on Musharaka certificates 79,023 - Return on bank balances and term deposits 32,586,650 7,919,230

578,185,838 195,330,193

OPERATING EXPENSES

Remuneration of the investment adviser 11 37,481,372 32,760,234 Remuneration of the custodian 12 5,324,665 5,627,330 SECP annual fee 16 1,874,068 1,651,527 Directors' meeting fee - 10,000 Auditors' remuneration 17 382,866 283,992 Brokerage commission and capital value tax 7,147,385 6,330,881 Other operating expenses 18 1,538,135 2,117,032

53,748,491 48,780,996

NET PROFIT FOR THE YEAR 524,437,347 146,549,197

Basic earnings per share 20 4.42 1.24



CASH FLOW STATEMENT


For the year ended June, 30 2006

Note 2006 2005 ------- Rupees -------

(Restated)CASH FLOWS FROM OPERATING ACTIVITIES

Net profit for the year 524,437,347 146,549,197

Adjustments for:Net gain on sale of marketable securities (344,435,118) (229,587,216)Unrealised (gain) / loss on held-for-trading investments (139,373,204) 129,220,511 Mark-up / return on investments and bank balances (36,659,122) (13,451,774)Dividend income (33,954,414) (50,061,448)

(29,984,511) (17,330,730)(Increase) / decrease in current assetsDue from brokers 1,854,404 22,357,498 Receivable against reverse repurchase transactions of

listed equity securities 110,374,175 426,646,990 112,228,579 449,004,488

Increase / (decrease) in current liabilitiesRemuneration payable to the investment adviser 4,721,138 9,189,902 Remuneration payable to the custodian (1,333,167) 141,301 Trade payables and other liabilities (39,368,086) 20,153,943

(35,980,115) 29,485,146 46,263,953 461,158,904

Sale of investments 8,206,685,795 4,854,079,607 Purchase of investments (8,240,249,451) (4,828,942,754)Dividends received 36,660,038 62,510,293 Mark-up / return received on investments

and bank balances 35,115,886 14,768,779 Security deposit refunded - 137,500 Taxes refunded / (paid) 79,813 (660,629)

38,292,081 101,892,796 Cash generated from operating activities 84,556,034 563,051,700

CASH FLOWS FROM INVESTING ACTIVITIES

Sale / redemption of available-for-sale investments 3,651,906 29,798,526 Purchase of available-for-sale investments (40,000,000) - Purchase of held-to-maturity investments (24,036,000) -

Cash (used in) / generated from investing activities (60,384,094) 29,798,526

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid (350,137,786) (146,846,150)Cash used in financing activities (350,137,786) (146,846,150)Net (decrease) / increase in bank balances (325,965,846) 446,004,076 Bank balances at the beginning of the year 543,106,331 97,102,255 Bank balances at the end of the year 10 217,140,485 543,106,331



ReservesCapital Revenue

Issued, Unrealised appreciation /subscribed Reserve (diminution) in value of

and fully paid-up on available for - sale UnappropriatedNote share capital Amalgamation investments Profit Total Total

……..……..…………………………………………….. Rupees ………………………………………………...

Balance as at July 1, 2004 - as previously reported 1,054,000,000 10,000,000 - 560,589,416 570,589,416 1,624,589,416

Effect of change in accounting policy 4.1.2 - - 2,634,112 (2,634,112) - -

Balance as at July 1, 2004 - restated 1,054,000,000 10,000,000 2,634,112 557,955,304 570,589,416 1,624,589,416

Profit for the year ended June 30, 2005 - - - 146,549,197 146,549,197 146,549,197

Adjustment for disposal of investments - - (587,000) - (587,000) (587,000)

Deficit on remeasurement of investments to fair value - - (1,397,211) - (1,397,211) (1,397,211)

Bonus shares issued during the year 131,750,000 - - (131,750,000) (131,750,000) -

Interim cash dividend paid at the rate of Rs.1.25 per share - - - (148,218,750) (148,218,750) (148,218,750)

Balance as at June 30, 2005 1,185,750,000 10,000,000 649,901 424,535,751 435,185,652 1,620,935,652

Balance as at July 1, 2005 - as previously reported 1,185,750,000 10,000,000 - 425,185,652 435,185,652 1,620,935,652

Effect of change in accounting policy 4.1.2 - - 649,901 (649,901) - -

Balance as at July 1, 2005 - restated 1,185,750,000 10,000,000 649,901 424,535,751 435,185,652 1,620,935,652

Profit for the year ended June 30, 2006 - - - 524,437,347 524,437,347 524,437,347

Adjustment for disposal of investments - - (88,759) - (88,759) (88,759)

Deficit on remeasurement of investments to fair value - - (226,874) - (226,874) (226,874)

Interim cash dividend paid at the rate of Rs.3.00 per share - - - (355,725,000) (355,725,000) (355,725,000)

Balance as at June 30, 2006 1,185,750,000 10,000,000 334,268 593,248,098 603,582,366 1,789,332,366



STATEMENT OF CHANGES IN EQUITYFor the year ended June, 30 2006


DISTRIBUTION STATEMENTFor the year ended June, 30 2006


2006 2005------- Rupees -------

(Restated)

Unappropriated profit brought forward 424,535,751 557,955,304

Net profit for the year 524,437,347 146,549,197

Interim cash dividend paid at the rate of Rs.3.00 (2005: Rs. 1.25) per share declared on February 07, 2006 & April 15, 2006 (355,725,000) (148,218,750)

Issue of bonus shares - Nil (2005: 12.5%) - (131,750,000)

Unappropriated profit carried forward 593,248,098 424,535,751



2006 2005------- Rupees -------

(Restated)

Net assets per share outstanding at the beginning of the year 13.67 15.41

Adjustment to net assets per share at the beginning of the year for bonus and right shares issued during the year - (1.71)

13.67 13.70

Net profit for the year - per share based on weighted average number of shares outstanding during the year

Net gain from sale of marketable securities 2.90 1.94

Unrealised gain / (loss) on held-for-trading investments - net 1.18 (1.09)

Net profit for the year excluding net gain from sale of marketable securities and unrealised gain / (loss) on held-for-trading investments - net 0.34 0.39

4.42 1.24

Deficit on revaluation of available-for-sale investment (0.0019) (0.0118)

Adjustment upon disposal of available-for-sale investment (0.0007) (0.0050)

Interim cash dividend per share outstanding at year endRs. 3.00 (2005: Rs. 1.25) per share (3.00) (1.25)

Net assets per share outstanding at year end 15.09 13.67



STATEMENT OF MOVEMENTS IN EQUITY AND RESERVES ‘PER SHARE’For the year ended June, 30 2006



NOTES TO THE FINANCIAL STATEMENTSFor the year ended June, 30 2006

1. LEGAL STATUS AND NATURE OF BUSINESS

BSJS Balanced Fund Limited (the company) was incorporated on March 26, 1994 as apublic limited company under the Companies Ordinance, 1984 and is listed on theKarachi Stock Exchange. The company's registered office is situated in Karachi in theprovince of Sindh. It was registered as an 'Investment Company' under the Non-BankingFinance Companies (Establishment and Regulation) Rules, 2003 (NBFC Rules) on April14, 2005. The company is a closed end mutual fund and its principal activity is to makeinvestments in marketable securities.

The company entered into an agreement with JS ABAMCO Limited [Formerly ABAMCOLimited] to act as its 'investment adviser' and MCB Bank Limited as its 'custodian' in linewith the requirements of NBFC Rules.

2. BASIS OF PRESENTATION

These financial statements have been prepared in accordance with the requirements ofCompanies Ordinance, 1984, the NBFC Rules, directives issued by the Securities andExchange Commission of Pakistan (SECP) and approved accounting standards asapplicable in Pakistan. Approved accounting standards comprise of such InternationalAccounting Standards (IASs) as notified under the provisions of the CompaniesOrdinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984, NBFCRules or directives issued by the SECP differ with the requirements of these standards,the requirements of Companies Ordinance, 1984, NBFC Rules or the requirements of thesaid directives take precedence.

3. BASIS OF MEASUREMENT

These financial statements have been prepared under the historical cost convention,except for investments in held-for-trading and available-for-sale securities which arestated at fair value.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Changes in accounting policies

Consequent upon revisions in IAS 39 “Financial Instruments: Recognition andMeasurement”, the company has changed its accounting policies in respect of thefollowing:

4.1.1 The transactions costs incurred in relation to acquisition of investments, classifiedas ‘held-for-trading’ are now charged to profit and loss account when incurred.Previously such costs incurred on acquisition of all class of investments wereincluded in the cost of related investments. This change in the accounting policyhas been accounted for retrospectively in accordance with the treatment specifiedin IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”. Hadthis policy not been changed, the brokerage commission and capital value tax as


included in the profit and loss account would have been Nil for the current andprior period and the net gain on sale of marketable investments would have beenlower by Rs. 6,093,985/- (2005: Rs. 5,241,432/-) and unrealised gain on saidinvestments would have been lower by Rs. 1,053,400/- (2005: unrealised losswould have been higher by Rs. 1,089,449/-). However, there is no impact of theabove change in accounting policy on the net profit and the assets and liabilitiesof the company for the current and prior period.

4.1.2 Gain / loss arising on remeasurement of available-for-sale investments to fairvalue is now included in equity. Previously, such gain / loss was recognised inthe profit and loss account. This change in the accounting policy has beenaccounted for retrospectively and comparative information has been restated inaccordance with the treatment specified in IAS 8 “Accounting Policies, Changesin Accounting Estimates and Errors”. The effect of the change in accounting policyhas been reflected in the statement of changes in equity. Had there been no changein accounting policy, the profit for the year ended June 30, 2006 would have beenlower by Rs. 315,633/- (2005: Rs. 1,984,211/-) and the unappropriated profit as ofJune 30, 2006 would have been higher by Rs. 334,268/- (2005: Rs. 649,901/-) andsurplus / (deficit) on revaluation of available-for-sale investments as of June 30,2006 would have been lower by Rs. 334,268/- (2005: Rs. 649,901/-).

4.2 Investments

The management of the company determines the appropriate classification of itsinvestments at the time of purchase and classifies these investments as follows:

Held-to-maturity

Investment securities with fixed maturities where management has both theintent and ability to hold to maturity, are classified as held-to-maturity.

Available-for-sale

Investments intended to be held for an indefinite period of time which may besold in response to need for liquidity or changes to interest rates or equity pricesare classified as available-for-sale.

Investments at fair value through profit and loss account

Investments classified as held-for-trading and those designated as such areincluded in this category. Investments are classified as held-for-trading if they areacquired for the purpose of selling in the near term.

All investments are initially measured at fair value plus, in the case of investmentsnot at fair value through profit and loss account, transaction costs that are directlyattributable to acquisition.


After initial recognition, investments which are classified as held-for-trading andavailable-for-sale are remeasured at fair value. Gains or losses on investmentsheld-for-trading are recognised in income. Gains or losses on available-for-saleinvestments are recognised in the shareholders' funds until the investment is sold,derecognised or is determined to be impaired, at which time the cumulative gainor loss previously reported in shareholders' funds is included in income.Investments classified as held-to-maturity are stated at amortised cost.

For investments in government securities, fair value is determined by reference toquotations obtained from Reuters page (PKRV). For investments in quotedmarketable securities, fair value is determined by reference to stock exchangequoted market prices at the close of business on balance sheet date except forthose term finance certificates not actively traded on the stock exchanges, inrespect of which rates quoted by brokers are used. However, the NBFC Rulesrequire the same to be valued on the basis of the closing price of the stockexchange on which the same are listed. Unquoted securities are valued atinvestment price or the break-up value as per last audited accounts, whichever islater in accordance with the NBFC Rules.

4.3 Derivatives

These are measured at their fair value. Derivatives with positive market values(unrealised gains) are included in other assets and derivatives with negativemarket values (unrealised losses) are included in other liabilities in the balancesheet. The resultant gains and losses are included in the income currently.

4.4 Securities under repurchase / resale agreements

Transactions of purchase under resale (reverse-repo) of marketable andgovernment securities are entered into at contracted rates for specified periods oftime. Securities purchased with a corresponding commitment to resell at aspecified future date (reverse-repos) are not recognised in the statement of assetsand liabilities. Amounts paid under these agreements are included as receivablesin respect of reverse repurchase transactions. The difference between purchaseand resale price is treated as income from reverse repurchase transactions andaccrued over the life of the reverse-repo agreement.

Transactions of sale under repurchase (repo) of marketable and governmentsecurities are entered into at contracted rates for specified periods of time.Securities sold with a simultaneous commitment to repurchase at a specifiedfuture date (repos) continue to be recognised in the statement of assets andliabilities and are measured in accordance with accounting policies for investmentsecurities. The counterparty liabilities for amounts received under thesetransactions are recorded as liabilities. The difference between sale andrepurchase price is treated as borrowing charges and accrued over the life of therepo agreement.


4.5 Taxation

The company is exempt from taxation under clause 99 of the Part I of the 2ndSchedule of the Income Tax Ordinance, 2001, subject to the condition that not lessthan 90% of its accounting income excluding realised and unrealised capital gainsfor the year is distributed amongst the company's' shareholders. The companyintends to avail this exemption for current and future periods. Accordingly, noprovision is made for current and deferred taxation in these financial statements.

4.6 Revenue recognition

Gain or loss on sale of marketable and government securities and derivatives isaccounted for in the period in which it arises.

Dividend income is recorded at the time of the closure of share transfer book ofthe company declaring the dividend. Dividend received on marketable securitiesacquired after the announcement of dividend till the book closure date are nottaken to income but reflected as reduction in the cost of investment.

Mark-up on term finance certificates and return on government securities arerecorded on time proportion basis taking into account the principal outstandingand the yield applicable.

Profit on bank deposits is recorded on accrual basis.

4.7 Financial instruments

All the financial assets and financial liabilities are recognised at the time when thecompany becomes a party to the contractual provisions of the instrument.Financial assets are derecognised when the company looses control of thecontractual rights that comprise the financial assets. Financial liabilities arederecognised when they are extinguished, that is, when the obligation specifiedin the contract is discharged, cancelled, or expired. Any gain or loss onderecognition of the financial assets and financial liabilities is taken to incomecurrently.

4.8 Offsetting of financial assets and liabilities

Financial assets and financial liabilities are only offset and the net amountreported in the balance sheet when the company has a legally enforceable right toset off the recognised amount and intends to either settle on a net basis, or torealise the asset and settle the liability simultaneously.


4.9 Trade date accounting

All regular way purchases / sales of investments are recognised on the trade datei.e., the date the company commits to purchase / sale the investments. Regular waypurchase / sale of investments require delivery of securities within three days afterthe transaction date as required by the stock exchange regulations.

4.10 Dividend

Dividend and other appropriations of reserves is recognised upon declaration andapproval by Board of Directors of the company.

5. SECURITY DEPOSITS

Represents the amount paid to National Clearing Corporation Pakistan Limited andCentral Depository Company of Pakistan Limited as security deposit.

6. DUE FROM BROKERS - considered good

6.1 Represents net amount due from brokers in respect of transactions in marketablesecurities.

6.2 Maximum amount due from broker (a related party) at the end of any month duringthe year was Rs. 31,992,507/- (2005: Rs. 105,542,551/-).

Note 2006 2005 ------- Rupees -------

7. INVESTMENTS

Held-for-trading

Listed equity securities 7.1 & 7.2 1,522,904,305 1,010,151,74Government securities 7.3 - 4,821,160 Right shares options 7.4 2,195,700 -

1,525,100,005 1,014,972,907 Available-for-sale

Quoted debt securities 7.5 26,008,782 19,976,321 Unquoted debt securities 7.6 30,000,000 -

Held-to-maturity

Musharaka certificates 7.7 24,115,023 - 1,605,223,810 1,034,949,228


7.1 This includes an aggregate amount of Rs. 48,766,200/- (2005: Rs. 21,777,000/-) in respect of investmentsin related parties.

7.2 Listed equity securities

Ordinary shares/certificates/units have a face value of Rs.10/- each unless stated otherwise.

Number of shares / certificates / units Percentage in relation to

Holdings Bonus / rights Disposed / Holdings at the Acquired received matured at the Acquisition Market Shares of

beginning during the during the during the end cost value Own net investee TotalSector Companies Note of the year year year year of the year (Rupees) (Rupees) assets company investments

Open End Mutual FundsUTP-Aggressive Assets Allocation Fund -

related party 7.1 - 1,163,528 - 1,163,528 - - - - - - (Face value of Rs.50/- each)

UTP-Islamic Fund - related party 7.1 - 63,123 - 63,123 - - - - - - (Face value of Rs.500/- each)

Modarabas Standard Chartered Modaraba 431,160 - 17,983 71,500 377,643 8,777,893 6,570,988 0.37 0.96 0.41

Leasing Orix Leasing Pakistan Limited 450,280 - 67,542 - 517,822 10,730,054 13,282,134 0.74 0.75 0.83

Investment Banks / Companies Jahangir Siddiqui and Company Limited-

related party 7.1 238,000 - - - 238,000 6,945,043 48,766,200 2.73 0.68 3.04

Pakistan Industrial Credit & Investment Corporation - 12,300 - 12,300 - - - - - -

Commercial BanksAskari Commercial Bank Ltd. 1,740,000 2,100 - 1,742,100 - - - - - - Allied Bank Limited - 100,000 - 100,000 - - - - - - Bank Alfalah Limited - 303,500 50,000 353,500 - - - - - - The Bank of Punjab 1,245,000 1,381,000 128,500 2,385,900 368,600 31,370,170 30,483,220 1.70 0.13 1.90 Faysal Bank Limited - 1,757,500 - 1,757,500 - - - - - - Metropolitian Bank Limited 859 - 286 - 1,145 34,360 78,719 0.004 0.0005 0.005 MCB Bank Limited - 5,368,400 - 4,840,500 527,900 117,137,330 111,017,370 6.20 0.10 6.92 National Bank of Pakistan 271,200 7,512,400 62,020 7,110,420 735,200 159,277,824 158,435,600 8.85 0.10 9.87 United Bank Limited - 220,000 - 70,000 150,000 22,996,875 20,662,500 1.15 0.02 1.29

InsuranceAdamjee Insurance Company Limited - 352,000 25,050 377,050 - - - - - - EFU General Insurance Company Limited 139,040 - - 139,040 - - - - - - EFU Life Assurance Company Limited 394,100 - 168,900 - 563,000 5,058,836 109,222,000 6.10 1.88 6.80 International General Insurance - - -

Company of Pakistan Limited 201,796 - 60,538 - 262,334 8,586,584 93,128,570 5.20 1.31 5.80

Textile Spinning Dewan Khalid Textile Mills Limited 184,063 - 18,406 - 202,469 2,350,931 6,630,860 0.37 3.92 0.41

Textile CompositeAzgard Nine Limited 281,000 6,286,837 590,100 6,286,837 871,100 22,037,184 19,207,755 1.07 1.00 1.20 Nishat Mills Limited 1,104,000 1,368,400 - 1,961,400 511,000 63,760,993 53,552,800 2.99 0.35 3.34





Synthetic & RayonDewan Salman Fiberes - 2,500 - 2,500 - - - - - -

Sugar and Allied IndustriesAl-Abbas Sugar Mills Limited 565,800 - - - 565,800 19,633,260 30,242,010 1.69 3.26 1.88

CementD.G. Khan Cement Company Limited - 6,888,400 - 6,392,300 496,100 47,108,381 44,649,000 2.50 0.27 2.78 Fauji Cement Company Limited - 3,500 - 3,500 - - - - - - Lucky Cement Limited - 4,928,500 - 4,077,500 851,000 91,829,755 88,121,050 4.92 0.32 5.49 Maple Leaf Cement Limited - 777,000 - 612,000 165,000 6,282,144 4,224,000 0.24 0.06 0.26

Refinery National Refinery Limited 118,900 - - 118,900 19,310,601 31,746,300 1.77 0.18 1.98Bosicor Pakistan Limited - 2,500 - 2,500 - - - - - -

Power Generation and DistributionKohinoor Energy Limited 255,369 - - 255,369 - - - - - - The Hub Power Company Limited 2,850,000 4,800 - 2,854,800 - - - - - -Kot Addu Power Company Limited - 2,400 - 2,400 - - - - - -

Oil & Gas Marketing Pakistan State Oil Company Limited - 667,900 - 667,900 - - - - - - Attock Petroluem Limited - 201,000 - 65,700 135,300 45,965,569 43,701,900 2.44 0.34 2.72 Sui Southern Gas Company Ltd. - 18,000 - 18,000 - - - - - -

Oil and Gas ExplorationOil and Gas Development Company Ltd. - 8,108,700 - 7,609,200 499,500 69,992,556 68,306,625 3.82 0.01 4.26 Pakistan Oilfield Limited 120,000 835,000 133,000 718,000 370,000 138,554,424 123,876,000 6.92 0.19 7.72 Pakistan Petroleum Limited - 3,886,900 - 3,512,900 374,000 78,881,946 79,231,900 4.43 0.05 4.94

EngineeringDadex Eternit Limited 349,000 - - - 349,000 12,598,900 19,369,500 1.08 3.24 1.21

Automobile AssemblerIndus Motor Company Limited 28,200 - - 28,200 - - - - - -

Cable and Electrical Goods Pak Elektron Limited 314,985 - 47,247 362,232 - - - - - -

TransportPakistan International Container

Terminal Limited 612,458 - - - 612,458 12,978,453 47,251,135 2.64 0.81 2.94 Pakistan International Airline - 8,000 - 8,000 - - - - - -

Technology and CommunicationPakistan Telecommunication Company Limited - 7,259,900 - 6,883,400 376,500 15,007,809 15,285,900 0.85 0.01 0.95 World Call Communication Limited - 165,000 - 165,000 - - - - - - World Call Telecom Limited - 239,000 - - 239,000 2,768,414 2,139,050 0.12 0.04 0.13 TRG Pakistan - 6,500 - 6,500 - - - - - - Pakistan PTA - 3,500 - 3,500 - - - - - -

Fertilizer Fauji Fertilizer Company Limited - 42,600 - - 42,600 5,384,127 5,154,600 0.29 0.01 0.32 Fauji Fertilizer Bin Qasim Limited 200,000 5,824,500 - 5,329,500 695,000 25,180,825 20,328,750 1.14 0.07 1.27 Engro Chemical (Pak) Limited - 405,600 - 254,000 151,600 27,588,354 25,681,040 1.44 0.10 1.60

PharmaceuticalAbbott Laboratories (Pakistan) Limited 145,807 - - 145,807 - - - - - - GlaxoSmithKline Pakistan Limited 203,530 - 50,882 - 254,412 16,968,453 44,776,512 2.50 0.23 2.79 Searle Pakistan Limited 29 - - 29 - - - - - - Wyeth Pakistan Limited 5,620 - - 5,620 - - - - - -

(Ordinary shares of Rs. 100/-each)





Chemical BOC Pakistan Limited 105,000 - - 105,000 - - - - - - ICI (Pakistan) Limited - 1,400 - 1,400 - - - - - -

Paper and BoardPackages Limited 409,542 - - 50,500 359,042 27,034,611 75,165,443 4.20 0.51 4.68

Food & Personal Care Products Rafhan Maize Products Company Limited 94,317 100 - - 94,417 11,548,394 82,614,875 4.62 1.02 5.15

MiscellaneousTri-Pack Films Limited 757,315 - - 757,315 - - - - - -

1,133,681,053 1,522,904,305 85.11 94.87

7.3 Government SecuritiesPakistan Investment Bonds 50 - - 50 - - - - - (Bonds of Rs.100,000/- each)

7.4 Right shares optionsNumber of Exercise

Sectors / Companies right shares price Market value % of total investments

CementD.G. Khan Cement Company Limited 42,225 35 2,195,700 0.14

7.5 Quoted Debt Securities


Holdings Disposed Holdings at the Acquired matured at the Acquisition Market

beginning during the during the end cost value Own net TotalSector Companies Note of the year year year of the year (Rupees) (Rupees) assets investments

Term Finance Certificates - face value of Rs.5,000/- each

Leasing CompaniesNetwork Leasing Corporation Limited 920 - 920 - - - - - Orix Leasing Pakistan Limited 7.5.1 1,000 - - 1,000 5,000,000 5,015,000 0.28 0.31

Commercial BanksMCB Bank Limited 7.5.2 1,638 - - 1,638 8,178,534 8,329,017 0.47 0.52

Oil and Gas Marketing CompaniesSui Southern Gas

Company Limited II 7.5.3 1,500 - - 1,500 2,497,980 2,538,465 0.14 0.16

Textile CompositeAzgard Nine Limited 7.5.4 - 2,000 - 2,000 9,998,000 10,126,300 0.57 0.63

25,674,514 26,008,782 1.46 1.62


7.5.1 These carry a mark-up equal to the State Bank of Pakistan discount rate plus 2.00% per annumwith a floor of 10.00% per annum and a cap of 13.00% per annum receivable semi-annually inarrears and will mature in July 2006. These are secured by a registered charge over specific leasedassets and related lease receivables of Orix Leasing Pakistan Limited.

7.5.2 These carry a rate of mark-up equal to the cut-off yield on the last successful 5 years PakistanInvestment Bonds' auction conducted by the State Bank of Pakistan plus 1.50% with a floor of11.75% per annum and a cap of 15.75% per annum receivable semi-annually in arrears and willmature in February 2008. These are unsecured and subordinated to all other indebtedness of MCBBank Limited including all deposits.

7.5.3 These carry a rate of mark-up equal to the State Bank of Pakistan discount rate plus 1.10% perannum with a floor of 11.50% per annum and a cap of 16.00% per annum receivable semi-annuallyin arrears and will mature in June 2007. These are secured by a first pari passu hypothecationcharge on present and future machinery and equipment and other movable property at Sui gasfields and, mortgage by deposit of title deeds of immovable property comprising of land andbuilding of the head office of Sui Southern Gas Company Limited.

7.5.4 These carry a rate of mark-up equal to ask side of six months KIBOR rate (for first time on lastpublic subscription date and then on the first day of the start of each semi annual month for profitdue) plus 2.40% per annum receivable semi-annually in arrears and will mature in September2012. These are secured by a first pari passu charge on present and future fixed assets of thecompany with a 25% margin in favour of the trustee.

7.5.5 In accordance with accounting policy of the fund, the above TFCs are valued on the basis of ratesquoted by broker as these are not actively traded on the stock exchanges. Had the same TFCs beenvalued on the basis of closing price of the stock exchange, the total market value as stated abovewould have been higher by Rs. 842,116/-.

7.6 Unquoted Debt SecuritiesPercentage in relation to

Cost / Number of amortised cost Own net Total

Sectors / Companies Note certificates (Rupees) assets investments

Term Finance Certificates - face value of Rs.1,000,000/- each

Optimus Limited 7.6.1 30 30,000,000 1.68 1.87

7.6.1 These are privately placed TFCs carrying a 14% rate of mark-up receivable on maturity in arrearsand will mature on December 31, 2006. These are secured by a first pari passu floating charge onall present and future assets of the issuer.

7.7 Certificates of MusharakaMusharaka certificates have a face value of Rs.1,000,000/- each

Modaraba Al Mali 7.7.1 24 24,115,023 1.35 1.50


7.7.1 These are registered musharaka certificates carrying a 13.69% rate of mark-up receivableon maturity in arrears and will mature on December 22, 2006. All payments of whatsoevernature to the registered holders in terms of this scheme shall rank in priority to allpayments made by Modaraba Al Mali to its Modaraba certificate holders.

Note 2006 2005------- Rupees -------

8. ACCRUED MARK-UP / RETURN

Income on reverse repurchase transactions in listed equity securities - 50,391 Mark-up on term finance certificates 1,989,570 769,197 Mark-up on government securities - 93,151 Return on bank balances 1,056,076 670,464

3,045,646 1,583,203 9. OTHER RECEIVABLE

This represents income tax deducted at source on certain transactions, recoverable by theCompany.

10. BANK BALANCES

Cash at bank - local currency

- In current accounts 1,951,015 3,325,920 - In PLS savings accounts 10.1 215,189,470 439,780,411 - In term deposits - 100,000,000

217,140,485 543,106,331

10.1 PLS savings accounts carry mark-up rates ranging from 5.00% to 9.75% (2005: 1.25% to8.00%) per annum.

11. REMUNERATION PAYABLE TO THE INVESTMENT ADVISER

The investment adviser is entitled to a remuneration for services rendered to the company underthe provisions of the NBFC Rules upto a maximum of 3% per annum of the average monthly netassets of the company during the first five years and 2% per annum based on such assetsthereafter. Accordingly, the investment adviser has charged its remuneration for the current yearat the rate of 2% per annum of the average net assets value.

12. REMUNERATION PAYABLE TO THE CUSTODIAN

The remuneration of the custodian is determined at the rate of 0.4% per annum upto Rs.1 billionof net assets of the company after charging remuneration of the investment adviser and annual feeto SECP, and 0.1% per annum for the amount exceeding Rs.1 billion in accordance with terms ofthe agreement. This also includes settlement charges for transactions dealt on behalf of thecompany, determined at the rate of Rs.0.005 per share per settlement per trade.


2006 2005------- Rupees -------

13. TRADE PAYABLES AND OTHER LIABILITIES

Payable to brokers against transactions in marketable securities - 39,461,801 SECP annual fee payable 1,874,068 1,651,527 Withholding tax 3,924 - Accrued expenses 292,546 425,296

2,170,538 41,538,624

14. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

2006 2005Number of shares

Ordinary shares of Rs. 10/- each fully

102,000,000 102,000,000 paid in cash 1,020,000,000 1,020,000,000

Ordinary shares of Rs. 10/- each issued as

16,575,000 16,575,000 bonus shares 165,750,000 165,750,000

118,575,000 118,575,000 1,185,750,000 1,185,750,000

2006 2005 No. of Percentage of No. of Percentage of shares holding (%) shares holding (%)

14.1 Shares of the company held by related parties as at June 30,

JS ABAMCO Limited [Formerly ABAMCO Limited] 21,423,992 18.07 21,423,992 18.07

Jahangir Siddiqui & Company Limited 11,063,812 9.33 3,218,062 2.71 Jahangir Siddiqui Investment Bank Limited 8,745,668 7.38 8,745,668 7.38 Unit Trust of Pakistan 6,600,199 5.57 6,613,699 5.58 UTP - Aggressive Asset Allocation Fund 9,323,500 7.86 - - UTP - Fund of Funds 1,399,000 1.18 - -

58,556,171 49.38 40,001,421 33.74

15. CAPITAL RESERVE

This represents the reserve created as a result of merger of BSJS Balanced Fund and SecurityStock Fund in the financial year ended June 30, 2002.

16. SECP ANNUAL FEE

This represents an amount equal to one tenth of one percent of NAV of the company calculatedand payable to SECP on annual basis under the requirement of Rule 54 of NBFC Rules.


2006 2005------- Rupees -------

(Restated)17. AUDITORS' REMUNERATION

Audit fee 200,000 180,000 Fee for half yearly review 90,000 80,000 Fee for special certifications and sundry advisory services 55,000 - Out of pocket expenses 37,866 23,992

382,866 283,992

18. OTHER OPERATING EXPENSES

Listing fees 60,000 216,750 Share registrar charges 868,003 783,584 Mutual fund rating fee 100,000 12,735 Clearing charges 282,605 746,557 CDC charges 67,500 205,544 Professionals tax 100,000 100,000 MUFAP subscription 20,066 23,160 Bank charges 39,961 28,702

1,538,135 2,117,032

19. TAXATION

No provision for taxation has been made in these financial statements in view of theexemption available under clause 99 of the Part I of the Second Schedule of the IncomeTax Ordinance, 2001 and the fact that 90% of the company's income excluding realisedand unrealised capital gains has been distributed amongst the shareholders as an interimdividend. Further the company is also exempt from the provisions of section 113(minimum tax) under clause 11 of Part IV of the Second Schedule of the Income TaxOrdinance, 2001.

The income tax assessments of the company have been finalised upto and includingassessment year 2002 - 2003. For tax years 2003, 2004 and 2005, the company has filed taxreturns which are deemed to be assessed under section 120 of the Income Tax Ordinance,2001, unless amended.

20. BASIC EARNINGS PER SHARE

Net profit for the year (Rupees) 524,437,347 146,549,197

Weighted average number of ordinary shares outstanding during the year 118,575,000 118,575,000

Basic earnings per share (Rupees) 4.42 1.24


20.1 No figure for diluted earnings per share has been presented as the company has notissued any instrument which could have an impact on earnings per share whenexercised.

21. TRANSACTIONS WITH RELATED PARTIES

Related parties include JS ABAMCO Limited [Formerly ABAMCO Limited] being theinvestment adviser, Jahangir Siddiqui & Company Limited being the holding companyof the investment adviser, Jahangir Siddiqui Capital Markets Limited and JahangirSiddiqui Investment Bank Limited being subsidiaries of the holding company of theinvestment adviser and UTP Large Cap. Fund, UTP Growth Fund, Unit Trust of Pakistan,UTP Income Fund, UTP Islamic Fund, UTP Fund of Funds, UTP Aggressive AssetAllocation Fund and UTP A 30+ Fund being funds under common management.

The transactions with the related parties are in the normal course of business, atcontracted rates and terms determined in accordance with the market rates.

Note 2006 2005 ------- Rupees -------

JS ABAMCO Limited [Formerly ABAMCO Limited]Remuneration to investment adviser 37,481,372 32,760,234 Dividend paid 64,271,976 21,513,740

Jahangir Siddiqui & Company LimitedDividend received 595,000 357,000 Dividend paid 31,202,186 4,022,578

Jahangir Siddiqui Capital Markets LimitedBrokerage 21.1 1,885,893 1,070,205 Dividend paid - 14,355

Jahangir Siddiqui Investment Bank LimitedDividend paid 26,237,004 16,208,335

Unit Trust of PakistanDividend paid 19,800,596 8,267,124

UTP - Fund of FundsDividend paid 4,513,250 -

UTP - Islamic FundPurchase of units 50,000,000 - Redemption of units 50,125,615 -

UTP - Aggressive Asset Allocation FundPurchase of units 110,000,000 - Redemption of units 116,445,949 - Dividend paid 34,326,000 -


21.1 This represents the amount of brokerage commission paid to the related party andnot the purchase or sale value of securities transacted through them as the ultimatecounter-parties in respect of purchases and sales are not related.

22. FINANCIAL RISK MANAGEMENT POLICIES

22.1 Market risk

Market risk is the risk that the value of a financial instrument will fluctuate as aresult of changes in market prices. The investment adviser manages market risk bymonitoring exposure on marketable securities by following the internal guidelinesof the Investment Committee and regulations laid down by the SECP.

22.2 Yield / interest rate riskYield risk is the risk of decline in earnings due to adverse movement of the yieldcurve.

Interest rate risk is the risk that the value of the financial instrument will fluctuatedue to changes in the market interest rates. Sensitivity to interest rate risk arisesfrom mismatches of financial assets and liabilities and off-balance sheet financialinstruments that mature or reprice in a given period. The investment advisermanages these mismatches through risk management strategies where significantchanges in gap positions can be adjusted.

The company is not materially exposed to yield / interest rate risk as all thefinancial instruments are of short term nature and there are no interest bearingfinancial liabilities giving rise to mismatches of financial assets and financialliabilities.

22.3 Liquidity risk

Liquidity risk is the risk that an enterprise will encounter difficulty in raising fundsto meet commitments associated with financial instruments. The investmentadviser manages liquidity risk by following internal guidelines of the InvestmentCommittee such as monitoring maturities of financial assets and financial liabilitiesand investing in liquid financial assets.The company is not materially exposed to liquidity risk as all obligations /commitments of the company are short term in nature and all assets of thecompany are readily disposable on the stock exchanges and over-the-countermarket except for unquoted TFCs. Furthermore, the company maintains adequatecash balances to meet its commitments associated with financial instruments.

22.4 Credit risk

Credit risk arising from the inability of the counter parties to meet the terms of thecompany’s financial instrument contracts is generally limited to the amounts, ifany, by which the counterparty obligations exceed the obligations of the company.The company is not materially exposed to credit risk.

23. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the amount for which an asset could be exchanged, or a liability settled,between knowledgeable willing parties in an arm's length transactions. Consequentlydifferences can arise between carrying values and their fair value estimates.

Underlying the definition of fair value is the presumption that the company is a goingconcern without any intention or requirement to curtail materially the scale of itsoperations or to undertake a transaction on adverse terms.

Financial assets which are tradable in an open market are revalued at the market pricesprevailing on the balance sheet date. The estimated fair value of all other financial assetsand liabilities is considered not significantly different from book value as the items areshort term in nature.

24. CORRESPONDING FIGURES

Certain prior year's figures have been reclassified consequent upon certain changes incurrent year's presentation. Such reclassifications are not considered material at thefinancial statements level and hence not disclosed separately.

25. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue by the Board of Directors of thecompany on July 29, 2006.

26. GENERAL

Figures have been rounded off to the nearest Rupee.



2006 2005Rupees Rupees

ABAMCO Limited - Investment adviser

IncomeRemuneration from the BSJS Balanced Fund 37,481,372 32,760,234 Dividend 64,271,976 21,513,740

101,753,348 54,273,974 Expenses

Salaries and benefits 10,103,151 5,235,508 Staff retirement benefits 334,986 196,832 Advertisement 1,541,501 1,773,094 Depreciation / amortisation 3,869,382 2,965,899 Printing and stationery 779,548 388,927 Rent, rates, taxes and maintenance 988,064 857,613 Travelling, conveyance and vehicle maintenance 833,696 725,157 Postage 184,552 258,055 Telephone 392,174 355,571 Legal and professional 806,895 634,275 Fees and subscription 664,991 414,963 IT service 530,965 300,812 Utilities 383,346 241,946 Donations 638,440 119,942 Office security 218,308 141,403 Entertainment 81,621 135,402 Insurance 238,364 169,184 Auditors' remuneration 35,987 29,861 Newspaper 12,761 10,901 Directors meeting fee - 398 General 78,962 12,900 Financial charges 6,283,206 5,080,050

29,000,900 20,048,693

Profit for the year 72,752,448 34,225,281

Notes:

1) Revenue directly related to Fund has been included in the above statement.2) All expenses are prorated on the basis of Net Assets value of all the funds.


STATEMENT OF INCOME & EXPENDITUREof Investment Adviser in Relation to the Fund

PATTERN OF SHAREHOLDINGFrom - 34 Shareholder Statistics


No. of Share Share Holding Total SharesHolders From To Held

705 1 100 32,409 1308 101 500 352,369 1754 501 1000 1,034,774 902 1001 5000 1,955,994 204 5001 10000 1,423,303 91 10001 15000 1,093,935 51 15001 20000 887,244 30 20001 25000 701,604 24 25001 30000 659,128 12 30001 35000 401,118 9 35001 40000 343,189 5 40001 45000 214,668 7 45001 50000 343,625 8 50001 55000 416,943 8 55001 60000 454,062 3 60001 65000 187,402 2 65001 70000 137,250 1 70001 75000 71,750 3 75001 80000 234,436 3 80001 85000 248,339 1 85001 90000 90,000 2 90001 95000 184,500 5 95001 100000 496,000 1 100001 105000 102,500 2 105001 110000 213,687 3 110001 115000 342,250 3 115001 120000 351,607 1 125001 130000 128,424 1 130001 135000 135,000 2 135001 140000 276,211 1 145001 150000 146,250 1 160001 165000 162,763 2 165001 170000 337,500 1 170001 175000 173,250 1 190001 195000 190,839 1 200001 205000 202,661 1 205001 210000 210,000 1 220001 225000 225,000 1 320001 325000 325,000 2 345001 350000 692,579 1 395001 400000 400,000 1 500001 505000 500,500 1 555001 560000 558,245 1 585001 590000 588,342 1 700001 705000 705,000 1 1215001 1220000 1,217,837 1 1235001 1240000 1,237,500 1 1365001 1370000 1,367,063 2 1395001 1400000 2,798,500 1 1740001 1745000 1,745,000 1 1965001 1970000 1,969,500 1 2240001 2245000 2,245,000 1 2330001 2335000 2,331,524 1 2695001 2700000 2,700,000 1 2790001 2795000 2,794,255 1 3450001 3455000 3,453,500 1 3985001 3990000 3,990,000 1 4000001 4005000 4,003,000 1 4955001 4960000 4,957,000 1 6175001 6180000 6,177,000 1 6600001 6605000 6,600,199 1 8745001 8750000 8,745,668 1 9320001 9325000 9,323,500 1 10560001 10565000 10,563,312 1 21420001 21425000 21,423,992

5189 118,575,000


Categories of No. of Share Total Shares PercentageShare Holders Holders Held

Individual 5095 15,827,306 13.3479 Investment Companies 51 44,152,253 37.2357 Insurance Companies 6 16,785,416 14.1559 Joint Stock Companies 2 2,246,743 1.8948 Financial Institutions 11 14,622,612 12.3320 Modarbas & Mutual Funds 6 22,176,070 18.7021 Foreign Investors 6 2,101,775 1.7725 Others 12 662,825 0.5590

5189 118,575,000 100.0000

DISCLOSURE TO PATTERN OF SHARE HOLDING

No. of Shares Held

1. Associated Companies, Undertakings and Related Parties:

JS ABAMCO Limited 21,423,992Jahangir Siddiqui & Company Limited 11,063,812 Jahangir Siddiqui Investment Bank Limited 8,745,668 Unit Trust of Pakistan 6,600,199 UTP Fund of Funds 1,399,000 UTP Aggressive Assets Allocation Fund 9,323,500

58,556,171

2. NIT & ICPInvestment Corporation of Pakistan 2,346

3. Directors, CEO, and their spouse and minor childern: NIL

4. Public Sector Companies & Corporations: NIL

5. Banks, DFIs, NBFCs, Insurance CompaniesModarbas and Mutual Funds 97,736,351

6. Executives NIL

BRANCH NETWORK OF THE INVESTMENT ADVISOR


JS ABAMCO Head Office7th Floor, The Forum,G-20Khayaban-e-Jami, Block-9, CliftonKarachi-75600Tel: (92-21) 111-222-626Fax: (92-21) 5361724

JS ABAMCO (Shahra - e -Faisal branch)Shop No. 8, Ground Floor,Plot No 26-A, Block 6,Business Avenue, PECHS, Main Shahra - e -Faisal, Karachi - 75350Ph: 021-4322094-96Fax: 021-4322093

JS ABAMCO LahoreGround Floor, 307-Upper Mall, Lahore - 54000UAN: 042-111-222-626Fax: 042-5789108

JS ABAMCO IslamabadShop No 6&7, Razia Sharif Plaza,Blue Area, Islamabad - 44000Ph: 051-2802095-96Fax: 051-2802094

JS ABAMCO HyderabadProperty No 97, Ground Floor,Saddar, Hydrabad Cantonment, Hyderabad - 71000Ph: 022-2720250, 2720077, 2720010Fax: 022-2720581

JS ABAMCO Gujranwala40, Trust Plaza, GT. Road, Gujranwala - 52250Ph: 055-3252953Fax: 055-3253373

JS ABAMCO Sialkot27th Paris Road,Sialkot - 53100Ph: 052-4298501-02Fax: 052-4298503

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 12th Annual General Meeting of the Company will be held at10:45 a.m. on Saturday, September 30, 2006 at Beach Luxury Hotel, M. T. Khan Road, Karachito transact the following business:

1. To confirm the minutes of the 11th Annual General Meeting held on October 29, 2005.

2. To receive, consider and adopt the audited financial statements of the Company togetherwith the Report of Directors and Auditors for the year ended June 30, 2006.

3. To approve the interim dividends of Rs. 1.75 and Rs. 1.25 per share (i.e. total dividend ofRs. 3.00 per share) already paid to the shareholders during the year ended June 30, 2006.

4. To appoint auditors for the year ending June 30, 2007 and to fix their remuneration. TheAudit Committee has recommended reappointment of the retiring auditors, Messrs. FordRhodes Sidat Hyder & Co., Chartered Accountants.

Special Business

5. To consider and if thought fit to pass the following resolution as Ordinary Resolution.

"RESOLVED that pursuant to the Securities and Exchange Commission ofPakistan's (SECP) Circular No. 19 of 2004 dated April 14, 2004 (the Circular), andthe Karachi Stock Exchange's Notice dated April 23, 2004 to Listed Companies, theDirectors of the Company be and are hereby authorized to place the subsequentQuarterly Financial Statements of the Company on the Website of JS ABAMCOLimited [Formerly ABAMCO Limited], the Investment Adviser of the Company,instead of sending the same by post to the Members, subject to the fulfillment of theconditions contained in the said Circular, including the obtention of priorpermission of the SECP.

FURTHER RESOLVED that all procedural formalities for placement of thesubsequent Quarterly Financial Statements on the Website of JS ABAMCO Limited[Formerly ABAMCO Limited] be fulfilled with the assistance of an InformationTechnology ("IT") Service Provider and the IT personnel of JS ABAMCO Limited."

6. To transact any other business with the permission of the Chair.

STATEMENT U/S 160(1) (b) OF THE COMPANIES ORDINANCE, 1984

The Securities and Exchange Commission of Pakistan (SECP) vide circular No. 19 of 2004 hasallowed listed companies to place the quarterly / half yearly accounts on the websites of theCompany instead of sending the same to the shareholders by post subject to fulfillment ofcertain conditions. The Board has recommended the placement of quarterly / half yearlyaccounts on the website of the Investment advisor, www.abamco.com. Now the consent of theshareholders in this context is solicited to move for obtaining approval of the SECP.

The directors of the Company have no interest except to the extent of their shareholding.

By order of the BoardSuleman Lalani

Company SecretaryKarachi: September 1, 2006


NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. The share Transfer Books of the Company will remain closed from September 23, 2006 to September 30, 2006 (both days inclusive). Transfer received in order at the office ofShare Registrar, Technology Trade (Pvt.) Limited at the close of business on or beforeSeptember 22, 2006 will be treated in time for the purpose of attendance at the meeting.

2. All members are entitled to attend and vote at the meeting. A member entitled to attendand vote is entitled to appoint another member as proxy to attend, speak and vote for him/ her.

3. An instrument of proxy and power of attorney, if any, under which it is signed or anotarially certified copy of such power of attorney, to be valid, be deposited with theCompany not later than 48 hours before the scheduled time of the meeting.

4. Any individual beneficial owner of shares registered as book entry securities with CentralDepository Company of Pakistan Limited, entitled to attend and vote at this meeting,must bring his / her original NIC or passport, account and participant ID number toprove his / her identity, and in case of proxy, must enclose an attested copy of his / herNIC or passport. Representatives of corporate members should bring the usualdocuments required for this purpose.

5. Shareholders are requested to notify immediately changes, if any, in their registeredaddress, to the Share Registrar.

BSJS Balanced Fund Limited

Investment Adviser: JS ABAMCO Limited [Formerly ABAMCO Limited]7th Floor, The Forum, G - 20, Block 9, Khayaban-e-Jami, Clifton, Karachi

UAN: 111-222-626


BSJS BALANCED FUND LIMITEDTWELVETH ANNUAL GENERAL MEETING

The Company Secretary,BSJS Balanced Fund Limited7th Floor, The Forum, G-20,Khayban-e-Jami, Clifton,Karachi - 75500

I / We of being the member of BSJS Balanced Fund Limited, holding ordinary shares as perregistered Folio No. CDC A/c No.(for members who have shares in CDS)hereby appoint Mr. / Ms. of _____________ or failing him / her Mr. / Ms. of as my / ourproxy in my / our absence to attend and vote for me / us and on my / our behalf at the 12thAnnual General Meeting of the Company to be held at 10.45 a.m. on Saturday, September 30,2006 at Beach Luxury Hotel, M. T. Khan Road, Karachi.

Witnesses:

1. Name 2. NameSignature SignatureAddress Address

CNIC/Passport No. CNIC/Passport No.

Important:

1. This proxy form, duly completed and signed, must be received at the office of Companysituated at 7th Floor, The Forum, G-20, Khayban-e-Jami, Clifton, Karachi not less than 48hours before the scheduled time of the meeting.

2. No person shall act as proxy, unless he / she himself / herself is a member with theCompany, except that a Corporation may appoint a person who is not a member.

3. If a member more than one proxies and more than one instruments of proxy aredeposited by a member with the Company, all such instruments of proxy shall berendered invalid.

4. Any individual beneficial owner of shares registered as book entry securities with CentralDepository Company of Pakistan Limited, entitled to attend and vote at this meeting,must bring his / her original CNIC or passport, account and participant ID number toprove his / her identity, and in case of proxy, must enclose an attested copy of his / herCNIC or passport. Representatives of corporate members should bring the usualdocuments required for this purpose.

FORM OF PROXY

| Annual report 2006BSJS Balanced Fund Limited

Signature on Rs. 5/-Revenue Stamp

The signature should agree with theSpecimen registered with Company

annual report 2006 - js investmentsmr. muhammad arshad 04 0 mian raza mansha 01 0 mr. aftab ahmed...

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