UTP-BSJS Fund Formated 22-9-7 · Karachi - 75530, Pakistan Legal Adviser Bawaney & Partners Room No.404, 4th floor, Beaumont Plaza, 6-Cl-10, Beaumont Road, Civil Lines Karachi-75530

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CONTENTS

Vision and Mission Statement

Organization

Directors’ Report to the Shareholders

Performance Table / Key Financial Data

Statement of Compliance with the Code of Corporate Governance

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

Auditors’ Report to the Members

Balance Sheet

Income Statement

Cash Flow Statement

Statement of Changes in Equity

Distribution Statement

Statement of Movement in Equity and Reserves ‘Per Share’

Notes to the Financial Statement

Statement of Income & Expenditure of Investment Advisor in relation to the Fund

Pattern of Shareholding

Branch Network

Notice of Meeting

Form of Proxy

BSJS BALANCED FUND LIMITED

Annual Report 2007 01

Annual Report 200702


Pursuit of Professional Excellence

VisionTo be Industry Leaders in Financial Services

Mission

• Shareholder Value • Integrity • Commitment

Core Values


ORGANIZATION

Investment Adviser

JS ABAMCO Limited7th Floor, The Forum, G-20Khayaban-e-Jami, Block-9, CliftonKarachi-75600Tel: (92-21) 111-222-626 Fax: (92-21) 5361724E-mail: [email protected]: www.abamco.com

Board of Directors

Nazar Mohammad Shaikh ChairmanMuhammad Najam Ali Chief Executive OfficerMuhammad Yousuf AmanullahAli Hassan HamdaniMunawar Alam SiddiquiAdil MatcheswalaAftab Ahmed Khan

Audit Committee

Munawar Alam Siddiqui ChairmanMuhammad Yousuf Amanullah MemberNazar Mohammad Shaikh Member

Chief Financial Officer & Company Secretary

Suleman Lalani

Custodian

MCB Bank Ltd.MCB Tower,I.I. Chundrigar Road, Karachi.Tel: (92-21) 2419770Fax: (92-21) 2416371

Auditors

Ford Rhodes Sidat Hyder & Co.Chartered AccountantsProgressive Plaza, Beaumont RoadP.O. Box 15541Karachi - 75530, Pakistan

Legal Adviser

Bawaney & PartnersRoom No.404, 4th floor,Beaumont Plaza, 6-Cl-10,Beaumont Road, Civil LinesKarachi-75530.

Bankers

Atlas Bank LimitedABN AMRO BankBank Al-Habib LimitedThe Bank of PunjabHabib Metropolitan Bank LimitedJS Bank LimitedMCB Bank Limitedmybank LimitedSoneri Bank Limited

Share Registrar

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




DIRECTORS’ REPORT TO THE SHAREHOLDERS

The Board of Directors of BSJS Balanced Fund Limited (the Fund), is pleased to present the Annual Report for theyear ended June 30, 2007.

1. Market Outlook

During the year under review, the KSE-100 index appreciated from 9,989.41 at June 30, 2006 to 13,772.46on June 30, 2007, up by 37.9%. Key drivers behind the rise were increased inflow of foreign investment andcontinuation of pro-business policies by the government. The market towards the end of the outgoing fiscalyear rallied on the back of positive budgetary expectations. Key index drivers were banking and insurancewhile the index heavy weight, exploration and production (E&P) sector, was among the major laggards.

The banking sector continued to remain in favor during the outgoing fiscal year due to favorable sectorpolicies by the government over the recent years (liberalization and deregulation) and increased foreigninflow of liquidity. The insurance sector outperformed the market due to strong economic growth andexpectations of positive sector fundamentals going forward. The E&P sector was a major underperformerdue to production concerns in E&P companies during the outgoing fiscal year.

On the policy front, the State Bank of Pakistan (SBP) maintained a tight monetary posture in order to containinflationary expectations from building up in the economy. The SBP had in July 2006 resorted to the twintightening measures of raising the discount rate from 9% to 9.5% and enhancing the reserve requirementsfor commercial banks, which resulted in a rise in KIBOR of almost 100 basis points. Since July 06, SBP has notovertly tightened its monetary policy stance, but it has continued to mop up excess liquidity in the bankingsystem through open market operations and T-bill auctions.

Average CFS rates during the year fell to 14% as compared to 16.16% last year. This has primarily been theresult of greater availability of funds due to increase in fixed income mutual funds in the market.

2. Fund Performance

The net income of the Fund for the year ended June 30, 2007, including unrealized gain on investment, wasRs. 658.483 million, which works out to Rs. 5.55 per share (2006: Rs. 4.42 per share) of the par value of Rs. 10.

The net assets of the Fund as on June 30, 2007 were Rs. 2.152 billion compared to Rs. 1.789 billion on June30, 2006. The increase in net assets, including the cash dividends of Rs. 296.437 million paid during the year,comes to Rs. 659.62 million or 36.9%.

The Fund has paid two interim cash dividends during the year aggregating Rs. 2.50 (or 25%) per share. Theinterim cash dividends of Rs. 296.437 million comes to 45% of the net income for the year including theunrealized capital gain. As this dividend is more than 90% of the Fund’s net income excluding the realizedcapital gains for the year; therefore, the income of the Fund will not be subject to income tax under Clause99 of Part 1 of the 2nd Schedule of the Tax Ordinance, 2001.

Non-Banking Finance Companies (Establishment & Regulation) Rules, 2003 provides that “a security listedon a stock exchange shall be valued at its last sale price on such exchange on the date on which it is valuedor if such exchange is not open on such date, then at its last sale price on the next preceding date on whichsuch exchange was open and if no sale is reported for such date the security shall be valued at an amountneither higher than the closing 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 indicative of fair value


of the underlying security. According to the guidelines of IAS-39, to reflect the reliable measure of fair valueto Term Finance Certificates, the Management Company has adopted policy of valuation of TFCs based onthe average quotes available from reputable brokerage houses dealing in money market transactions.

3. Investment Objective and Strategy

The Fund maintains a mix of equities and debt instruments. Earnings comprise of capital appreciation,dividend income, and interest income. The portfolio seeks capital growth through investments in marketablesecurities with better-than-average appreciation potential and liberal dividend policies.

4. Fund and Investment Adviser Rating

The Pakistan Credit Rating Agency (PACRA) has assigned a 5-Star fund rating to BSJS Balanced Fund Limited,which reflects a good performance relative to its peers. The rating is a composite measure of two factorsnamely a) returns, and b) risk associated with the returns measured by Sharpe Ratio.

PACRA has awarded an “AM2+” asset manager rating to JS ABAMCO Limited (JS ABAMCO) to “AM2+”. Therating denotes the company’s very strong capacity to manage the risks inherent in asset management andthe asset manager meets very high investment management industry standards and benchmarks.

5. Compliance

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

a. The financial statements present fairly the state of affairs of the Fund, the results of its operations, cashflows 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, requirements of the Trust Deed and directivesof the Securities and Exchange Commission of Pakistan have been followed in preparation of thefinancial statements (except for valuation of TFCs).

e. The system of internal control is sound in design and has been effectively implemented and monitored.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, 2007.k. The Company does not have any staff retirement benefit scheme as it has no employees on its payroll.




6. Meetings of the Directors

During the year 5 meetings of the Board of Directors were held. The attendance of each director for thesemeetings is as follows:

Name Eligible to attend Meetings attended

Mr. Munawar Alam Siddiqui 05 05Mr. Muhammad Najam Ali 05 05Mr. Shamshad Nabi 02 01Mr. Nazar Mohammad Shaikh 03 03Mr. Yousuf Amanullah 05 05Mr. Adil Matcheswala 03 02Mr. Aftab Ahmed Khan 05 0Mr. Ali Hassan Hamdani 05 0

7. Auditors

The Fund’s external auditors, Messrs. Ford Rhodes Sidat Hyder & Co., Chartered Accountants, have completedtheir three year term. The Audit Committee has recommended change of auditors of the Fund as requiredunder Rule 59(b) of the NBFC Rules, 2003. The Audit Committee has recommended appointment of M. YousufAdil Saleem & Co., Chartered Accountants, as the Fund’s auditors for the year ending June 30, 2008. M. YousufAdil Saleem & Co. have consented to act as auditors of the Fund for the ensuing year.

8. Acknowledgment

The Directors expresses their gratitude to the Securities and Exchange Commission of Pakistan for its valuablesupport, assistance and guidance. The Board also thanks the employees of the Investment Adviser and theCustodian for their dedication and hard work and the shareholders for their confidence in the Management.

On behalf of the Board

Muhammad Najam AliKarachi: August 18, 2007 Chief Executive Officer


-

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

Paid-up Capital as at June 30

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

Net assets as at June 30

PERFORMANCE TABLE / KEY FINANCIAL DATA

2007 2006 2005 2004 2003 2002 2001 2000 1999 1998

Net assets (Rs.) 2,152,513,342 1,789,332,366 1,620,935,652 1,624,589,416 661,901,356 420,177,488 358,863,765 257,468,398 150,189,564 150,122,0721,000,000 1,000,0002,152.51 1,789.33 1,620.94 1,624.59 661.90 420.18 358.86 257.47 150.19 150.12

Net assets value per share (Rs.) 18.15 15.09 13.67 15.41 19.46 12.35 10.55 10.30 10.01 10.01

Paid-up Capital (Rs.) 1,185,750,000 1,185,750,000 1,185,750,000 1,054,000,000 340,000,000 340,000,000 340,000,000 250,000,000 150,000,000 150,000,0001,185.75 1,185.75 1,185.75 1,054.00 340.00 340.00 340.00 250.00 150.00 150.00

Net profit for the year (Rs.) 658,483,246 524,437,347 146,549,197 282,688,060 292,723,868 41,498,144 28,316,007 67,463,873 15,067,492 11,961,275658.48 524.44 146.55 282.69 292.72 41.50 28.32 67.46 15.07 11.96

Earnings per share (Rs.) 5.55 4.42 1.24 3.24 7.11 1.22 0.94 2.70 1.01 0.80

Dividend distribution in percentage Cash 25 30 12.50 - 15 15 11 31 10 8 Bonus - - - 12.50 10 - - - - -

Dividend Distribution 355.73 148.22 131.75 85 51 27.5 46.5 15 12

Year

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




-

100.00

200.00

300.00

400.00

500.00

600.00

700.00

Profit Earned / Distribution for the Year

Profit Earned Distribution

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Earning per share


Profit Earned / Distribution 2007

Dividend Distribution45%

Transferred to RetainedEarnings

55%

Total Assets 2007

Bank Balances37%

Investment in debt securities2%

Other Assets2%

Investment in equity securities59%




STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCEFOR THE YEAR ENDED JUNE 30, 2007

This Statement is being presented in compliance with the Code of Corporate Governance (‘the Code’) containedin Regulation 37 of the Listing Regulations of the Karachi Stock Exchange,. The purpose of the Code is to establisha framework of good governance, whereby a listed company is managed in compliance with the best practices ofcorporate governance.

BSJS Balanced Fund Limited (the Company) has applied the principles contained in the Code in the followingmanner:

1. The Company encourages representation of independent non-executive directors and directors representingminority interests on its Board of 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 than ten listed companies,including the Company.

3. All the directors of the Company are registered as taxpayers and none of them has defaulted in payment ofany loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declaredas a defaulter by that stock exchange.

4. During the year under review two casual vacancies occurred in the Board which were duly filled in by otherdirectors within the prescribed period.

5. JS ABAMCO Limited, the Investment Advisor of the Company has prepared a “Statement of Ethics and BusinessPractices”, which has been signed by all the directors of the Company and employees of the InvestmentAdvisor.

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

7. All the powers of the Board have been duly exercised and decisions on material transactions, includingappointment and determination of remuneration and terms and conditions of employment of the CEO havebeen taken by the Board.

8. The meetings of the Board were presided over by the Chairman, and in his absence, by a director elected bythe Board for this purpose and the Board met at least once in every quarter during the year. Written noticesof the meetings of the Board of Directors, along with agenda and working papers, were circulated at leastseven days before the meetings. The minutes of the meetings were appropriately recorded and circulated.

9. The Company arranged an orientation course for the directors of the Company during the year to apprisethem of their roles and responsibilities.

10. During the year, there was no change of CFO / Company Secretary. The remuneration and terms and conditionsof employment of CFO / Company Secretary have been approved by the Board.

11. The directors’ report has been prepared in compliance with the requirements of the Code and fully describesthe salient matters required to be disclosed.


12. The financial statements of the Company were duly endorsed by the CEO and CFO before approval of theBoard.

13. The directors, CEO and Executives of the Company do not hold any interest in the Shares of the Companyother than those disclosed in the directors’ report.

14. The Company has complied with all the corporate and financial reporting requirements of the Code withrespect to the Company.

15. The Board has formed an Audit Committee comprising three non-executive directors including the chairmanof the Committee.

16. The meetings of the Audit Committee are held every quarter prior to approval of interim and annual resultsof the Company as required by the Code. The Board has approved terms of reference of the Audit Committee.

17. The Company has outsourced the Internal Audit function to M/s Anjum Asim Shahid Rehman, CharteredAccountants, who are considered suitably qualified and experienced for the purpose and are conversantwith the policies and procedures of the Company and their representatives are involved in the internal auditfunction on a full time basis.

18. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating underthe quality control review program of the Institute of Chartered Accountants of Pakistan, that they or anyof the partners of the firm, their spouses and minor children do not hold shares of the Company and thatthe firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelineson Code of Ethics as adopted by the Institute of Chartered Accountants of Pakistan.

19. The statutory auditors or the persons associated with them have not been appointed to provide otherservices except in accordance with the listing regulations and the auditors have confirmed that they haveobserved IFAC guidelines in this regard.

20. We confirm that all other material principles contained in the Code have been complied with.

Muhammad Najam AliKarachi: August 18, 2007 Chief Executive Officer




REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCEWITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE

We have reviewed the Statement of Compliance with the best practices (the Statement) contained in the Code ofCorporate Governance (the Code) for the year ended June 30, 2007 prepared by the Board of Directors of BSJSBalanced Fund Limited (the Company) to comply with the Listing Regulation No. 37 (Chapter XI) of the KarachiStock Exchange, where the Company is listed.

The responsibility for compliance with the Code of is that of the Board of Directors of the Company. Our responsibilityis to review, to the extent where such compliance can be objectively verified, whether the Statement reflects thestatus of the Company’s compliance with the provisions of the Code and report if it does not. A review is limitedprimarily to inquiries of the Company 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 of the accounting andinternal control systems sufficient to plan the audit and develop an effective audit approach. We have not carriedout any special review of the internal control system to enable us to express an opinion as to whether the Board’sstatement on internal control 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 the Statement does notappropriately reflect the Company’s compliance, in all material respects, with the best practices contained in theCode for the year ended June 30, 2007.

Karachi: August 18, 2007Ford Rhodes Sidat Hyder & Co.

Chartered Accountants


AUDITORS’ REPORT TO THE MEMBERS

We have audited the annexed balance sheet of BSJS Balanced Fund Limited (the Company) as at June 30, 2007and the related income statement, cash flow statement, statement of changes in equity, distribution statement andstatement of movement in equity 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 explanations which, to the best of ourknowledge and belief, were necessary for the purposes of our audit.

It is the responsibility of the Company’s management to establish and maintain a system of internal control, andprepare and present the above said statements in conformity with the Approved Accounting Standards, therequirements of the Companies Ordinance, 1984 (the Ordinance) and the Non-Banking Finance Companies(Establishment and Regulation) Rules, 2003 (the NBFC Rules). Our responsibility is to express an opinion on thesestatements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the above said statementsare free of any material misstatement. An audit includes examining on a test basis, evidence supporting the amountsand disclosures in the above said statements. An audit also includes assessing the accounting policies and significantestimates made by management, as well as, evaluating the overall presentation of the above said statements. Webelieve that our audit provides a reasonable basis for our opinion and, after due verification, we report that:

(a) as referred to in notes 4.1 and 7.3.4 to the financial statements, the Company has a policy to valueits investments in quoted Term Finance Certificates based on brokers’ quotations instead of thestock exchange closing price as required by the NBFC Rules, resulting in understatement of netassets and equity as of June 30, 2007 by Rs.2,315,184/-;

(b) in our opinion, proper books of account have been kept by the Company as required by theOrdinance and the NBFC Rules;

(c) in our opinion:

(i) the balance sheet and income statement together with the notes thereon have beendrawn up in conformity with the Ordinance and except for as stated in paragraph (a)above, the NBFC Rules and are in agreement with the books of account and are furtherin accordance with accounting policies consistently applied;

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

(iii) the business conducted, investments made and the expenditure incurred during theyear were in accordance with the objects of the Company;

(d) except for the effect of the matter as stated in paragraph (a) above, in our opinion and to the bestof our information and according to the explanations given to us, the balance sheet, incomestatements, cash flow statement, statement of changes in equity, the distribution statement andstatement of movement in equity and reserves per share together with the notes forming partthereof conform with the Approved Accounting Standards as applicable in Pakistan, and give theinformation required by the Ordinance and the NBFC Rules in the manner so required and




respectively give a true and fair view of the state of the Company’s affairs as at June 30, 2007 andof the profit, its cash flows, changes in equity and undistributed income and movement in equityand reserves per share for the year then ended; and

(e) in our opinion zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of1980), was deducted by the Company and deposited in the Central Zakat Fund established undersection 7 of that Ordinance.

Karachi: August 18, 2007Ford Rhodes Sidat Hyder & Co.

Chartered Accountants

FINANCIALSTATEMENTS




BALANCE SHEETAS AT JUNE 30, 2007

Note 2007 2006 ----------Rupees--------

Assets

Non-Current Assets

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

Current Assets

Due from brokers 6 12,248,475 7,770,979Investments 7 1,469,071,117 1,605,223,810Accrued mark-up / return 8 5,681,917 3,045,646Dividend and other receivable 9 5,562,290 5,860,113Bank balances 10 885,243,834 217,140,485

2,377,807,633 1,839,041,033

Total Assets 2,378,945,133 1,840,178,533

Liabilities

Current Liabilities

Remuneration payable to the investment adviser 11 38,011,742 37,481,372Remuneration payable to the custodian 12 409,366 379,730Accrued and other liabilities 13 2,242,786 2,170,538Dividend payable 185,767,897 10,814,527

Total Liabilities 226,431,791 50,846,167

Net Assets 2,152,513,342 1,789,332,366

Share Capital And Reserves

Authorised capital150,000,000 (2006: 150,000,000) ordinary sharesof Rs. 10/- each 1,500,000,000 1,500,000,000

Issued, subscribed and paid-up capital 14 1,185,750,000 1,185,750,000Capital reserve 15 10,000,000 10,000,000Unappropriated profit 955,293,844 593,248,098Net unrealised gain on available-for-sale investments 1,469,498 334,268

2,152,513,342 1,789,332,366

The annexed notes 1 to 25 form an integral part of these financial statements.

Muhammad Najam AliChief Executive Officer

Nazar Mohammad ShaikhChairman

Munawar Alam SiddiquiDirector




INCOME STATEMENTFOR THE YEAR ENDED JUNE 30, 2007

Note 2007 2006 ----------Rupees--------

Income

Net gain on sale of marketable securities 142,974,084 344,435,118Net unrealised gain on held-for-trading investments 457,544,337 139,373,204Net gain on marketable securities 600,518,421 483,808,322

Mark-up / return on:- Bank balances and term deposits 53,589,510 32,586,650- Term finance certificates 10,223,579 3,969,655- Musharaka certificates 1,527,777 79,023- Government securities - 23,794- Certificates of investments 1,854,268 -- Reverse repurchase transactions of listed equity securities - 23,763,980

67,195,134 60,423,102

Dividend income 41,920,996 33,954,414709,634,551 578,185,838

Operating Expenses

Remuneration of the investment adviser 11 38,011,742 37,481,372Remuneration of the custodian 12 4,831,584 5,324,665SECP annual fee 16 1,900,587 1,874,068Capital value tax 712,048 805,666Brokerage commission 3,851,509 6,341,719Auditors' remuneration 17 466,437 382,866Director meeting fee 25,000 -Other operating expenses 18 1,352,398 1,538,135

51,151,305 53,748,491

Net Income For The Year 658,483,246 524,437,347

Basic earnings per share 20 5.55 4.42






CASH FLOW STATEMENTFOR THE YEAR ENDED JUNE 30, 2007

2007 2006 ---------------Rupees---------------

Cash flows from operating activities

Net income for the year 658,483,246 524,437,347

Adjustments for:Net gain on sale of marketable securities (142,974,084) (344,435,118)Net unrealised gain on held-for-trading investments (457,544,337) (139,373,204)Mark-up / return on:- Bank balances and term deposits (53,589,510) (32,586,650)- Term finance certificates (10,223,579) (3,969,655)- Musharaka certificates (1,527,777) (79,023)- Government securities - (23,794- Certificates of investments (1,854,268) -Dividend income (41,920,996) (33,954,414)

(51,151,305) (29,984,511)

(Increase) / decrease in current assetsDue from brokers (4,477,496) 1,854,404Receivable against reverse repurchase transactions of

listed equity securities - 110,374,175

(4,477,496) 112,228,579

Increase / (decrease) in current liabilitiesRemuneration payable to the investment adviser 530,370 4,721,138Remuneration payable to the custodian 29,636 (1,333,167)Accrued and other receivable 72,248 (39,368,086)

632,254 (35,980,115)(54,996,547) 46,263,953

Sale of investments 4,418,254,171 8,206,685,795Purchase of investments (3,685,074,046) (8,240,249,451)Dividend received 42,048,920 36,660,038Mark-up / return received on investments and bank balances 64,558,863 35,115,886Tax refunded 169,899 79,813

839,957,807 38,292,081Cash inflow from operating activities 784,961,260 84,556,034

Cash flows from investing activitiesSale / redemption of available-for-sale investments 40,626,219 3,651,906Purchase of available-for-sale investments (60,000,000) (40,000,000)Purchase of held-to-maturity investments (25,000,000) (24,036,000)Maturity of held-to-maturity investments 49,000,000 -Cash inflow / (outflow) from investing activities 4,626,219 (60,384,094)

Cash flows from financing activitiesDividends paid (121,484,130) (350,137,786)Net increase / (decrease) in cash and cash equivalents 668,103,349 (325,965,846)

Cash and cash equivalents at the beginning of the year 217,140,485 543,106,331

Cash and cash equivalents at the end of the year 885,243,834 217,140,485








STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED JUNE 30, 2007

Issued, Net unrealisedsubscribed Capital gain / (loss) on

and paid-up Reserve Unappropriated available-for-salecapital (Note 15) profit investments Total

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

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

Net income for the year - - 524,437,347 - 524,437,347

Adjustment for disposal of available-for-saleinvestments - - - (88,759) (88,759)

Unrealised loss on remeasurement ofavailable-for-sale investments to fair value - - - (226,874) (226,874)

Interim cash dividendFirst - at the rate of Re.1/- per share - - (118,575,000) - (118,575,000)

Second - at the rate of Rs.2/- per share - - (237,150,000) - (237,150,000)

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

Net income for the year - - 658,483,246 - 658,483,246

Adjustment for disposal of available-for-sale investments - - - (35,298) (35,298)

Unrealised gain on remeasurement ofavailable-for-sale investments to fair value - - - 1,170,528 1,170,528

Interim cash dividendFirst - at the rate of Re.1/- per share - - (118,575,000) - (118,575,000)

Second - at the rate of Re.1.5/- per share - - (177,862,500) - (177,862,500)

Balance as at June 30, 2007 1,185,750,000 10,000,000 955,293,844 1,469,498 2,152,513,342






DISTRIBUTION STATEMENTFOR THE YEAR ENDED JUNE 30, 2007

2007 2006 ---------------Rupees---------------

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

Net income for the year 658,483,246 524,437,347

Interim cash dividendFirst - at the rate of Re.1/- (2006: Re.1/-) per share

declared on February 20, 2007 (2006: February 07, 2006) (118,575,000) (118,575,000)

Second - at the rate of Re.1.5/- (2006: Rs.2/-) per sharedeclared on May 25, 2007 (2006: April 15, 2006) (177,862,500) (237,150,000)

Unappropriated profit carried forward 955,293,844 593,248,098








STATEMENT OF MOVEMENT IN EQUITY AND RESERVES ‘PER SHARE’FOR THE YEAR ENDED JUNE 30, 2007

2007 2006 ---------------Rupees---------------

Net assets per share outstanding at the beginning of the year 15.09 13.67

Net income for the year - per share based on weighted averagenumber of shares outstanding during the year

Net gain from sale of marketable securities 1.21 2.90

Net unrealised gain on held-for-trading investments 3.86 1.18

Net income for the year excluding net gain from sale ofmarketable securities and unrealised gainon held-for-trading-investments 0.48 0.34

5.55 4.42

Surplus / (deficit) on revaluation of available-for-sale investment 0.0124 (0.0019)

Adjustment for disposal of available-for-sale investments (0.0003) (0.0007)

Interim cash dividendFirst - at the rate of Re.1/- (2006: Re.1/-) per share (1.00) (1.00)

Second - at the rate of Re.1.5/- (2006: Rs.2/-) per share (1.50) (2.00)

Net assets per share outstanding at the end of the year 18.15 15.09






NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30, 2007

1. LEGAL STATUS AND NATURE OF BUSINESS

The BSJS Balanced Fund Limited (the Company) was incorporated on March 26, 1994 as a public limitedcompany under the Companies Ordinance, 1984 and is listed on the Karachi Stock Exchange. The Company'sregistered office is situated in Karachi in the province of Sindh. It was registered as an 'Investment Company'under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (NBFC Rules) onApril 14, 2005. The company is a closed end mutual fund and its principal activity is to make investments inmarketable securities.

The Company entered into an agreement with JS ABAMCO Limited to act as its 'investment adviser' and MCBBank Limited as its 'custodian' in line with the requirements of the NBFC Rules.

2. BASIS OF PRESENTATION

These financial statements have been prepared in accordance with the requirements of Companies Ordinance,1984, the NBFC Rules, directives issued by the Securities and Exchange Commission of Pakistan (SECP) andapproved accounting standards as applicable in Pakistan. Approved accounting standards comprise of suchInternational Accounting Standards (IASs) as notified under the provisions of the Companies Ordinance,1984. Wherever, the requirements of the Companies Ordinance, 1984, the NBFC Rules or directives issued bythe SECP differ with the requirements of these standards, the requirements of Companies Ordinance, 1984,the NBFC Rules or the requirements of the said directives take precedence.

3. BASIS OF MEASUREMENT

These financial statements have been prepared under the historical cost convention except for investmentsand derivatives which are accounted for as stated in notes 4.1 and 4.2 below.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Investments

The management of the Company determines the appropriate classification of its investments at thetime of purchase and classifies these investments as follows:

Held-to-maturity

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

Available-for-sale

Investments intended to be held for an indefinite period of time which may be sold in response toneed for liquidity or changes to interest rates or equity prices are classified as available-for-sale.




Investments at fair value through income statement

Investments classified as held-for-trading and those designated as such are included in this category.Investments are classified as held-for-trading if they are acquired for the purpose of selling in the nearterm.

All investments are initially measured at fair value plus, in the case of investments not at fair valuethrough income statement, transaction costs that are directly attributable to acquisition.

After initial recognition, investment which are classified as held-for-trading and available-for-sale areremeasured at fair value. Gains or losses on investments held-for-trading are recognised in income.Gains and losses on available-for-sale investments are recognised in the shareholders' fund until theinvestment 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 asheld-to-maturity are stated at amortised cost.

For investments in government securities, fair value is determined by reference to quotations obtainedfrom Reuters page (PKRV). For investments in quoted marketable securities, fair value is determinedby reference to stock exchange quoted market prices at the close of business on balance sheet dateexcept for those term finance certificates not actively traded on the stock exchanges, in respect ofwhich rates quoted by brokers are used. However, the NBFC Rules require the same to be valued onthe basis of the closing price of the stock exchange on which the same are listed. Unquoted securitiesare valued at investments price or the break-up value as per last audited accounts, whichever is laterin accordance with the NBFC Rules.

4.2 Derivatives

These are measured at their fair value. Derivatives with positive fair values (unrealised gains) areincluded in other assets and derivatives with negative fair values (unrealised losses) are included inother liabilities in the balance sheet. The resultant gains and losses are included in the income currently.

4.3 Securities under repurchase / resale agreements

Transactions of purchase under resale (reverse-repo) of marketable and government securities areentered into at contracted rates for specified periods of time. Securities purchased with a correspondingcommitment to resell at a specified future date (reverse-repos) are not recognised in the statementof assets and liabilities. Amounts paid under these agreements are included as receivables in respectof reverse repurchase transactions. The difference between purchase and resale price is treated asincome from reverse repurchase transactions and accrued over the life of the reverse-repo agreement.

Transactions of sale under repurchase (repo) of marketable and government securities are enteredinto at contracted rates for specified periods of time. Securities sold with a simultaneous commitmentto repurchase at a specified future date (repos) continue to be recognised in the statement of assetsand liabilities and are measured in accordance with accounting policies for investment securities. Thecounterparty liabilities for amounts received under these transactions are recorded as liabilities. Thedifference between sale and repurchase price is treated as borrowing charges and accrued over thelife of the repo agreement.


4.4 Revenue recognition

Gain or loss on sale of marketable and government securities and derivatives is accounted for in theperiod in which it arises.

Dividend income is recorded at the time of the closure of share transfer book of the company declaringthe dividend. Dividend received on marketable securities acquired after the announcement of dividendtill the book closure date are not taken to income but reflected as reduction in the cost of investment.

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

Profit on bank deposits is recorded on accrual basis.

4.5 Taxation

The Company is exempt from taxation under clause 99 of the Part 1 of the 2nd Schedule of the IncomeTax Ordinance, 2001, subject to the condition that not less than 90% of its accounting income excludingrealised and unrealised capital gains for the year is distributed amongst the Company's shareholders.The Company intends to avail this exemption for current and future periods. Accordingly, no provisionis made for current and deferred taxation in these financial statements.

4.6 Financial instruments

All the financial assets and financial liabilities are recognised at the time when the Company becomesa party to the contractual provisions of the instrument. Financial assets are derecognised when theCompany looses control of the contractual rights that comprises that financial assets . Financialliabilities are derecognised when they are extinguished, that is, when the obligation specified in thecontract is discharged, cancelled or expired. Any gain or loss on derecognition of the financial assetsand financial liabilities is taken to income currently.

4.7 Impairment of financial assets

An assessment is made at each balance sheet date to determine whether there is objective evidencethat a specific financial asset may be impaired. If such evidence exists, any impairment loss, is recognisedin the income statement.

For available for sale equity investments reversal of impairment losses are recorded as increases incumulative changes in fair value through equity.

In addition, a provision is made to cover impairment for specific groups of assets where there is ameasurable decrease in estimated future cash flows.

4.8 Trade date accounting

All regular way purchases / sales of investments are recognised on the trade date i.e., the date theCompany commits to purchase / sale the investments. Regular way purchase / sale of investmentsrequire delivery of securities within three days after the transaction date as required by the stockexchange regulations.




4.9 Offsetting of financial assets and liabilities

Financial assets and financial liabilities are only offset and the net amount reported in the balancesheet when the Company has a legally enforceable right to set off the recognised amount and intendsto either settle on a net basis, or to realise the asset and settle the liability simultaneously.

4.10 Dividend

Dividend and other appropriations of reserves is recognised upon the declaration and approval bythe Board of Directors of the Company.

4.11 Cash and cash equivalents

Cash and cash equivalents comprise bank balances and short term deposits.

4.12 Accounting estimates and judgements

The preparation of financial statements requires management to make judgements, estimates andassumptions that effect the application of policies and reported amounts of assets and liabilities,income and expenses. The estimates and associated assumptions are based on historical experienceand various other factors that are believed to be reasonable under the circumstances, the result ofwhich form the basis of making judgements about carrying values of assets and liabilities. The estimatesand underlying assumptions are reviewed on an ongoing basis.

Judgments made by management in the application of accounting policies that have significant effecton the financial statements and estimates with a significant risk of material adjustment are explainedin the relevant accounting policies / notes in the financial statements.

4.13 Accounting standards and interpretations not yet effective

The following standards, interpretations and amendments of approved accounting standards, witheffective dates mentioned against each, are either not relevant to the Company's operations or arenot expected to have significant effect on the Company's financial statements:

IAS- 1 Presentation of Financial Statements - effective from accounting period beginningamendments relating to capital disclosures on or after January 01, 2007

IAS- 41 Agriculture effective from accounting period beginningon or after May 22, 2007

IFRS- 2 Share based Payment effective from accounting period beginningon or after December 06, 2006

IFRS- 3 Business Combinations effective for business combinations for whichagreement date is on or after December 06, 2006

IFRS- 5 Non-current Assets Held for Sale and effective from accounting period beginningDiscontinued Operations on or after December 06, 2006


IFRS- 6 Exploration for and Evaluation of Mineral effective from accounting period beginningResources on or after December 06, 2006

IFRIC - 10 Interim Financial Reporting and Impairment effective from accounting period beginningon or after November 01, 2006

IFRIC - 11 Group and Treasury Share Transactions effective from accounting period beginningon or after March 01, 2007

IFRIC - 12 Service Concession Arrangements effective from accounting period beginningon or after January 01, 2008

IFRIC - 13 Customer Loyalty Programmes effective from accounting period beginningon or after July 01, 2008

IFRIC - 14 The Limit on a Defined Benefit Asset, effective from accounting period beginningMinimum Funding Requirements and their on or after January 01, 2008Interaction

5. SECURITY DEPOSITS

Represent amount paid to National Clearing Corporation Pakistan Limited and Central Depository Companyof Pakistan Limited as security deposit.

6. DUE FROM BROKERS - considered good

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

6.2 Maximum amount due from a related party at the end of any month during the year was Rs.15,101,671/- (2006: Rs.31,992,507/-).

Note 2007 2006 ---------------Rupees---------------

7. INVESTMENTS

At fair value through income statement - held-for-trading

Listed equity securities 7.1 1,391,958,301 1,522,904,305Right shares options 7.2 480,000 2,195,700

1,392,438,301 1,525,100,005

Available-for-sale

Quoted debt securities 7.3 36,644,816 26,008,782Unquoted debt security 7.4 19,988,000 30,000,000

56,632,816 56,008,782

Held-to-maturity

Musharaka certificates - 24,115,023

Advance against term finance certificate 7.5 20,000,000 -1,469,071,117 1,605,223,810




7.1 Listed equity securitiesOrdinary shares/certificates/units have a face value of Rs.10/- each unless stated otherwise.

Holdings Bonus Holdings

at the Acquired received Disposed at the Acquisition Market Shares of

beginning during the during the during the end cost value Net investee Total

of the year year year year of the year Rupees Rupees assets company investments

Modarabas

Standard Chartered Modaraba 377,643 - 37,764 - 415,407 8,777,893 5,649,535 0.26 0.96 0.38

LeasingOrix Leasing Pakistan Limited 517,822 - - - 517,822 10,730,054 15,405,205 0.72 0.75 1.05

Investment Banks / CompaniesJahangir Siddiqui and Company Limited - 238,000 - - 100,000 138,000 4,026,958 75,486,000 3.51 0.39 5.14

a related party

Commercial Banks

Bank Alfalah Limited - 200,000 - 200,000 - - - - - -

Faysal Bank Limited - 400,000 - 400,000 - - - - - -MCB Bank Limited 527,900 2,246,300 - 2,774,200 - - - - - -

Habib Metropolitan Bank Limited 1,145 - - 1,145 - - - - - -

National Bank of Pakistan 735,200 3,511,100 68,205 4,314,505 - - - - - -

The Bank of Punjab 368,600 1,527,000 97,500 1,843,100 150,000 16,566,804 17,475,000 0.81 0.04 1.19

United Bank Limited 150,000 - - 150,000 - - - - - -

1,782,845 7,884,400 165,705 9,682,950 150,000 16,566,804 17,475,000 0.81 0.04 1.19

Insurance

Adamjee Insurance Company Limited - 225,000 - 225,000 - - - - - -

EFU Life Assurance Limited 563,000 1,000 375,999 - 939,999 5,286,981 253,799,730 11.79 1.88 17.28

International General Insurance Company of

Pakistan Limited 262,334 235,000 157,400 235,000 419,734 79,037,891 167,893,600 7.80 1.31 11.43

825,334 461,000 533,399 460,000 1,359,733 84,324,872 421,693,330 19.59 3.19 28.71

Textile Spinning

Dewan Khalid Textile Mills Limited 202,469 - 20,246 - 222,715 2,350,931 4,677,015 0.22 3.92 0.32

Textile Composite

Azgard Nine Limited 871,100 - - - 871,100 22,039,385 45,994,080 2.14 0.32 3.13Nishat Mills Limited 511,000 1,636,600 2,500 1,718,600 431,500 56,083,505 56,289,175 2.62 0.27 3.83

1,382,100 1,636,600 2,500 1,718,600 1,302,600 78,122,890 102,283,255 4.76 0.59 6.96

Sugar and Allied Industries

Al-Abbas Sugar Mills Limited 565,800 - - - 565,800 19,633,260 36,211,200 1.68 3.26 2.46

Cement

D.G. Khan Cement Company Limited 496,100 950,100 66,717 1,512,917 - - - - - -

Fauji Cement Company Limited - 750,000 - 750,000 - - - - - -

Lucky Cement Company Limited 851,000 1,569,100 - 2,320,100 100,000 10,578,935 13,775,000 0.64 0.04 0.94

Maple Leaf Cement Factory Limited 165,000 - - 165,000 - - - - - -

1,512,100 3,269,200 66,717 4,748,017 100,000 10,578,935 13,775,000 0.64 0.04 0.94

Refinery

National Refinery Limited 118,900 - - 118,900 - - - - - -

Oil & Gas Marketing

Attock Petroluem Limited 135,300 - - 135,300 - - - - - -

Pakistan State Oil Company Limited - 425,100 - 425,100 - - - - - -

Sui Southern Gas Company - 2,000 - 2,000 - - - - - -

135,300 427,100 - 562,400 - - - - - -

Oil and Gas ExplorationOil and Gas Development Company Limited 524,500 1,922,500 - 1,582,000 865,000 110,506,587 103,627,000 4.81 0.02 7.05

Pakistan Oilfield Limited 370,000 301,000 - 381,000 290,000 99,881,032 91,930,000 4.27 0.15 6.26

Pakistan Petroleum Limited 374,000 1,612,300 - 1,911,300 75,000 18,977,991 19,683,750 0.91 0.01 1.34

1,268,500 3,835,800 - 3,874,300 1,230,000 229,365,610 215,240,750 9.99 0.18 14.65

EngineeringDadex Eternit Limited 349,000 - - - 349,000 12,598,900 20,940,000 0.97 3.24 1.43

TransportPakistan International Container

Terminal Limited 612,458 - - - 612,458 12,978,453 51,936,438 2.41 0.81 3.54

Technology and CommunicationPakistan Telecommunication Company Limited 376,500 6,438,000 - 6,579,000 235,500 12,520,324 13,423,500 0.62 0.01 0.91

WorldCall Telecom Limited 239,000 - - 239,000 - - - - - -

615,500 6,438,000 - 6,818,000 235,500 12,520,324 13,423,500 0.62 0.01 0.91

Fertilizer

Fauji Fertilizer Company Limited 42,600 7,500 - - 50,100 6,282,905 6,074,625 0.28 0.01 0.41

Fauji Fertilizer Bin Qasim Limited 695,000 1,800,500 - 1,895,500 600,000 22,852,275 23,400,000 1.09 0.06 1.59

737,600 1,808,000 - 1,895,500 650,100 29,135,180 29,474,625 1.37 0.07 2.00

Pharmaceutical

GlaxoSmithKline Pakistan Limited 254,412 - 63,603 - 318,015 16,968,453 59,627,813 2.77 0.23 4.06

Paper and Board

Packages Limited 414,042 - 12,952 155,000 271,994 30,322,855 86,779,686 4.03 0.37 5.91

Food & Personal Care Products

Rafhan Maize Products Company Limited 94,417 - - - 94,417 11,548,402 221,879,949 10.31 1.02 15.10

590,550,774 1,391,958,301 64.66 94.75

Percentage in relation toNumber of shares / certificates / units

Sectors / Companies


7.2 Right shares options

Fertilizer

Engro Chemical Pakistan Limited 3,750 125 480,000 0.03

7.3 Quoted Debt Securities

Holdings Holdings

at the Acquired Matured at the Market

beginning during the during the end Cost value Net Total

Sectors / Companies Note of the year year year of the year Rupees assets investments

Term Finance Certificates - face value of

Rs.5,000/- each

Leasing Companies

Orix Leasing Pakistan Limited 1,000 - 1,000 - - - - -

Commercial Banks

MCB Bank Limited 7.3.1 1,638 - - 1,638 4,902,534 4,986,056 0.23 0.34

Bank Al-Habib Limited II 7.3.2 - 4,000 - 4,000 20,000,000 21,265,000 0.99 1.45

Textile Composite

Azgard Nine Limited 7.3.3 2,000 - - 2,000 9,994,000 10,393,760 0.48 0.71

Oil and Gas Marketing Companies

Sui Southern Gas Company Limited II 1,500 - 1,500 - - - - -

34,896,534 36,644,816 1.70 2.50

7.3.1

7.3.2

7.3.3

7.3.4

7.4 Unquoted Debt Security

Holdings Holdings

at the Acquired Matured at the

beginning during the during the end Cost Net Total

Companies Note of the year year year of the year Rupees assets investments

Optimus Limited (face value of Rs.1,000,000/- each) - 30 - 30 - - - -

Azgard Nine Limited (face value of Rs.5,000/- each) 7.4.1 - 4,000 - 4,000 19,988,000 0.93 1.36

19,988,000 0.93 1.36

7.4.1

7.5

These carry a rate of mark-up equal to the ask side of six months KIBOR rate plus 1.95% per annum receivable semi-annually inarrears and will mature in February 2015. These are unsecured and subordinated to all other indebtedness of Bank Al-HabibLimited including all deposits.

In accordance with accounting policy of the Company, the above TFCs are valued on the basis of rates quoted by brokers asthese are not actively traded on the stock exchanges. Had the same TFCs been valued on the basis of closing price of the stockexchange, the total market value as stated above would have been higher by Rs.2,315,184/-.

This represents Pre-IPO placement in TFC of Engro Chemical Pakistan Limited carry mark-up at the rate of 11.57% per annum.

Number of certificates Percentage in relation to

% of total

investments

These carry a rate of mark-up equal to the cut-off yield on the last successful 5 years Pakistan Investment Bonds' auctionconducted by the State Bank of Pakistan plus 1.5% with a floor of 11.75% per annum and a cap of 15.75% per annum receivablesemi-annually in arrears and will mature in February 2008. These are unsecured and subordinated to all other indebtedness ofMCB Bank Limited including all deposits.

These carry a rate of mark-up equal to ask side of six months KIBOR rate plus 2.4% per annum receivable semi-annually in arrearsand will mature in September 2012. 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.

These are privately placed TFCs carrying a rate of mark-up equal to six months KIBOR rate plus 3% per annum receivablequarterly and will mature on August 13, 2007. These are secured by a hypothecation charge over all the present and futureassets of the Company, a mortgage charge over the immovable properties of the Company and assignment of the proceeds ofright issue by incorporating a lien over the subscription account.

Sector / Company Number ofright shares

Exerciseprice

Marketvalue

Number of certificates Percentage in relation to

Rupees




Note 2007 2006

8. ACCRUED MARK-UP / RETURN

Mark-up on term finance certificates 2,139,171 1,989,570Return on bank balances 3,542,746 1,056,076

5,681,917 3,045,646

9. DIVIDEND AND OTHER RECEIVABLE

Dividend 4,563,102 4,691,026Tax deducted at source 999,188 1,169,087

5,562,290 5,860,113

10. BANK BALANCES

- In current accounts 2,124,202 1,951,015- In PLS saving accounts 10.1 883,119,632 215,189,470

885,243,834 217,140,485

10.1

11. REMUNERATION PAYABLE TO THE INVESTMENT ADVISER

12. REMUNERATION PAYABLE TO THE CUSTODIAN

13. ACCRUED AND OTHER LIABILITIES

SECP annual fee payable 1,900,587 1,874,068Withholding tax - 3,924Accrued expenses 342,199 292,546

2,242,786 2,170,538

14. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

Ordinary shares of Rs.10/- each 1,020,000,000 1,020,000,000 fully paid in cashOrdinary shares of Rs.10/- each issued as bonus shares 165,750,000 165,750,000

1,185,750,000 1,185,750,000118,575,000 118,575,000

The investment adviser is entitled to a remuneration for services rendered to the Company under the provisions of the NBFCRules upto a maximum of 3% per annum of the average monthly net assets of the Company during the first five years and2% per annum based on such assets thereafter. Accordingly, the investment adviser has charged its remuneration for thecurrent year at the rate of 2% per annum of the average net assets value.

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

2007

102,000,000 102,000,000

2006

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

Number of shares

16,575,000 16,575,000

PLS saving accounts carry mark-up rates ranging from 5% to11% (2006: 5% to 9.75%) per annum and includes balanceof Rs.201,105,744/- (2006: Rs.Nil) with JS Bank Limited - a related party.


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

14.1 Shares of the Company held by related partiesas at June 30,

JS ABAMCO Limited 23,323,992 19.67 21,423,992 18.07Jahangir Siddiqui & Company Limited 11,238,812 9.48 11,063,812 9.33JS Bank Limited 8,745,668 7.38 8,745,668 7.38Unit Trust of Pakistan 6,258,199 5.28 6,600,199 5.57UTP - Aggressive Asset Allocation Fund - - 9,323,500 7.86UTP - Fund of Funds - - 1,399,000 1.18

49,566,671 41.80 58,556,171 49.39

15. CAPITAL RESERVE

16. SECP ANNUAL FEE

2007 2006

17. AUDITORS' REMUNERATION

Audit fee 220,000 200,000Other services 200,000 145,000Out of pocket expenses 46,437 37,866

466,437 382,866

18. OTHER OPERATING EXPENSES

Share registrar charges 664,702 868,003Clearing charges 308,077 282,605Listing and rating fee 243,323 247,566Professional tax 100,000 100,000Bank charges 36,296 39,961

1,352,398 1,538,135

19. TAXATION

2007 200620. BASIC EARNINGS PER SHARE

Net profit for the year (Rupees) 658,483,246 524,437,347

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

Basic earnings per share (Rupees) 5.55 4.42

20.1

No provision for taxation has been made in these financial statements in view of the exemption available underclause 99 of the Part 1 of the Second Schedule of the Income Tax Ordinance, 2001 and the fact that 90% of theCompany's income excluding realised and unrealised capital gains has been distributed amongst the shareholdersas interim dividends. Further, the Company is also exempt from the provisions of section 113 (minimum tax) underclause 11 of Part IV of the Second Schedule of Income Tax Ordinance, 2001.

The income tax assessment of the Company have been finalized upto and including assessment year 2002-2003.For tax years 2003, 2004, 2005 and 2006, the Company has filed tax returns which are deemed to be assessedunder section 120 of the Income Tax Ordinance, 2001, unless amended.

No figure for diluted earnings per share has been presented as the Company has not issued any instrumentswhich would have an impact on earnings per share when exercised.

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

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

This represents an amount equal to one tenth of one percent of NAV of the Company calculated and payable toSECP on annual basis under the requirement of the NBFC Rules.

2007 2006




21. TRANSACTIONS WITH RELATED PARTIES

2007 2006Note

JS ABAMCO Limited

Remuneration of the investment adviser 38,011,742 37,481,372Dividends paid 58,309,980 64,271,976

Jahangir Siddiqui & Company Limited

Dividends received 595,000 595,000Dividends paid 28,097,030 31,202,186

JS Global Capital Limited(Formerly Jahangir Siddiqui Capital Markets Limited)

Brokerage commission 21.1 903,431 1,885,893

JS Bank Limited

Dividends paid - 26,237,004

Unit Trust of Pakistan

Dividends paid 15,645,497 19,800,596

UTP - Fund of Funds

Dividends paid 1,399,000 4,513,250

UTP - Islamic Fund

Purchase of units - 50,000,000Redemption of units - 50,125,615

UTP - Aggressive Asset Allocation Fund

Purchase of units - 110,000,000Redemption of units - 116,445,949Dividends paid 9,210,000 34,326,000

21.1 This represents the amount of brokerage commission paid to the related party and not the purchase or salevalue of securities transacted though them as the ultimate counter-parties in respect of purchases and salesare not related.

The transactions with related parties are in the normal course of business, at contracted rates and terms determinedin accordance with market rates.

Related parties include JS ABAMCO Limited being the investment advisor, Jahangir Siddiqui & Company Limitedbeing the holding company of the investment advisor, JS Bank Limited being subsidiary of the holding company ofthe investment advisor, JS Global Capital Limited (Formerly Jahangir Siddiqui Capital Markets Limited) beingassociated company of the holding company of the investment advisor and Unit Trust of Pakistan, UTP - Fund ofFunds, UTP - Islamic Fund, UTP - Aggressive Asset Allocation Fund, UTP - Growth Fund, UTP - Large Cap Fund,UTP - Income Fund, UTP - A30+ Fund, UTP - Capital Protected Fund and UTP - Capital Protected Fund II beingfunds under common management.

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


22. FINANCIAL RISK MANAGEMENT POLICIES

22.1 Market risk

Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes inmarket prices. The investment adviser manages market risk by monitoring exposure on marketablesecurities by following the internal guidelines of the Investment Committee and regulations laid downby the SECP.

22.2 Yield / interest rate risk

Yield risk is the risk of decline in earnings due to adverse movement of the yield curve.

Interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes inthe market interest rates. Sensitivity to interest rate risk arises from mismatches of financial assets andliabilities and off-balance sheet financial instruments that mature or reprice in a given period. Theinvestment adviser manages 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 the financial instruments areof short term nature and there are no interest bearing financial liabilities giving rise to mismatchesof financial assets and financial liabilities.

22.3 Liquidity risk

Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitmentsassociated with financial instruments. The investment adviser manages liquidity risk by followinginternal guidelines of the Investment Committee such as monitoring maturities of financial assets andfinancial liabilities and investing in liquid financial assets.

The Company is not materially exposed to liquidity risk as all obligations / commitments of theCompany are short term in nature and all assets of the Company are readily disposable on the stockexchanges and over-the-counter market except for unquoted TFCs. Furthermore, the Companymaintains adequate cash balances to meet its commitments associated with financial instruments.

22.4 Credit Risk

Credit risk arises from the inability of the issuers of the instruments or counter parties, in case of reverserepurchase transactions or other arrangements, to fulfill their obligations. The risk is generally limitedto principal amounts and accrued interest thereon, if any. The Company's policy is to enter into financialcontracts in accordance with the internal risk management policies and investment guidelines approvedby the Investment Committee. The Company is exposed to credit risk in respect of debt securities asdisclosed in note 7 to the financial statements.




23. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeablewilling parties in an arm's length transactions. Consequently differences can arise between carrying valuesand their fair value estimates.

Underlying the definition of fair value is the presumption that the Company is a going concern without anyintention or requirement to curtail materially the scale of its operations or to undertake a transaction onadverse terms.

Financial assets which are tradable in an open market are revalued at the market prices prevailing on thebalance sheet date. The estimated fair value of all other financial assets and liabilities is considered notsignificantly different from book value as the items are short term in nature.

24. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for the issue by the Board of Directors of the Company onAugust 18, 2007.

25. GENERAL

Figures have been rounded off to the nearest Rupee.





STATEMENT OF INCOME & EXPENDITUREOF INVESTMENT ADVISER IN RELATION TO THE FUND

2007 2006(Rupees) (Rupees)

JS ABAMCO LIMITED - Investment adviser

Income Remuneration from the BSJS Balanced Fund 38,011,742 37,481,372 Dividend 58,309,980 64,271,976

96,321,722 101,753,348Expenses Salaries and benefits 10,750,120 10,103,151 Staff retirement benefits 383,655 334,986 Advertisement 3,683,608 1,541,501 Depreciation / amotrtisation 3,278,959 3,869,382 Printing and Stationery 281,489 779,548 Rent, rates, taxes, and maintenance 1,745,793 988,064 Travelling, conveyance and vehicle maintenance 1,621,242 833,696

Postage 294,758 184,552 Telephone 400,330 392,174 Legal and professional 922,935 806,895 Fees and subscription 371,833 664,991 IT service 1,089,261 530,965 Utilities 459,487 383,346 Donations 682,418 638,440 Office security 298,069 218,308 Entertainment 84,610 81,621 Insurance 271,808 238,364 Auditors' remuneration 87,714 35,987 Newspaper 17,027 12,761 Directors meeting fee 24,410 - Fees and commision 444,177 - Royalty and advisory fee 739,711 - Miscellaneous expenses 85,900 78,962 Financial charges 4,365,481 6,283,206

32,384,796 29,000,900

Profit for the year 63,936,926 72,752,448

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.




PATTERN OF SHARE HOLDINGAS AT JUNE 30, 2007

No. of Total SharesShareholders From To Held

721 1 100 33,1891230 101 500 335,7921648 501 1000 986,082810 1001 5000 1,809,385192 5001 10000 1,345,77694 10001 15000 1,129,78562 15001 20000 1,102,47033 20001 25000 776,15324 25001 30000 671,22711 30001 35000 371,16910 35001 40000 385,0689 40001 45000 389,1818 45001 50000 395,1259 50001 55000 468,979

11 55001 60000 626,3991 60001 65000 61,6052 65001 70000 137,2502 70001 75000 147,5004 75001 80000 312,9985 80001 85000 416,4322 85001 90000 178,5002 90001 95000 184,5007 95001 100000 688,3752 100001 105000 207,5002 110001 115000 227,2502 115001 120000 235,8572 135001 140000 276,0001 145001 150000 146,2501 150001 155000 151,0002 165001 170000 337,5001 170001 175000 173,2501 190001 195000 190,8391 195001 200000 195,5001 200001 205000 202,6612 220001 225000 445,8751 280001 285000 285,0001 320001 325000 325,0002 345001 350000 693,7041 630001 635000 630,3421 700001 705000 705,0001 725001 730000 730,0001 745001 750000 747,0001 995001 1000000 1,000,0001 1045001 1050000 1,047,5001 1095001 1100000 1,100,0001 1145001 1150000 1,148,4871 1180001 1185000 1,183,0371 1235001 1240000 1,237,5001 2035001 2040000 2,037,5001 2790001 2795000 2,794,0001 3985001 3990000 3,990,0001 6170001 6175000 6,174,8371 6255001 6260000 6,258,1991 7250001 7255000 7,251,5001 8745001 8750000 8,745,6681 9995001 10000000 10,000,0001 10185001 10,185,5001 11235001 11,238,8121 23320001 23,323,992

4940 118,575,000

Share Holding

101900001124000023325000


DISCLOSURE TO PATTERN OF SHARE HOLDING

(% of Shareholding indicated where holding is 10% or more)

1 Associated Companies, Undertakings and Related Parties: SharesHeld

JS ABAMCO Limited 19.67% 23,323,992Jahangir Siddiqui & Company Limited 11,238,812JS Bank Limited 8,745,668Unit Trust of Pakistan 6,258,199

49,566,671

2 NIT and ICP

IDBP (ICP unit) 2,346National Bank of Pakistan (Trustee Department) 2,331,524

2,333,870

3 Director, CEO and their Spouse and Minor children NIL

4 Public Sector Companies & Corporations NIL

6 Executives NIL

5 Banks, DFIs,NBFCs, Insurance Companies,Modarabas & Mutual Funds 18.66% 22,124,998

Categories of Total Shares PercentageShare Holders Held

Individuals 4837 19,414,125 16.37Investment Companies 48 4,280,591 3.61Insurance Companies 4 16,790,916 14.16Joint Stock Companies 15 22,618,559 19.08Financial Institutions 11 36,699,741 30.95Modarabas & Mutual Funds 4 9,296,070 7.84Foreign Investors 9 8,188,275 6.91Others 12 1,286,723 1.09

TOTAL 4940 118,575,000 100.00

No. of ShareHolders




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,Business Avenue, PECHS, Block 6,Main Shahra - e -Faisal,Karachi - 75350Ph: 021-4322094-96Fax: 021-4322093

JS ABAMCO (Park Tower branch)Office No. 209, 2nd FloorPark Tower, Shahrah-e-FirdusiClifton Karachi.Ph: 021-5820100Fax: 021-5821655

JS ABAMCO (Hyderabad branch)Property No 41/97, Ground Floor,Saddar, Hydrabad Cantonment,HyderabadPh: 022-2720250, 2720077, 2720010Fax: 022-2720581

JS ABAMCO (Islamabad branch)65-W, Ground Floor # 6,Chaudhary Plaza, Fazal-e-Haq Road,Blue Area - IslamabadUAN: 051-111-222-626Fax: 051-2806323

JS ABAMCO (Lahore branch)Ground Floor,307-Upper Mall,Lahore - 54000UAN: 042-111-222-626Fax: 042-5789108

BRANCH NETWORK OF THE INVESTMENT ADVISOR

JS ABAMCO (Gujranwala branch)Shop No. 40, Ground FloorTrust Plaza, GT, Road,Gujranwala - 52250Ph: 055-3252953Fax: 055-3253373

JS ABAMCO (Multan branch)1st & 2nd Floor,185-Quaid-e-Azam Road,Multan Cantt.Ph: 061-450142-47

JS ABAMCO (Sialkot branch)27th Paris Road,Sialkot - 53100Ph: 052-4298501-02Fax: 052-4298503

JS ABAMCO (Peshawar branch)1st FloorState Life Building,34-The Mall, PeshawarPh: 091-5253844-6Fax: 091-5253850

JS ABAMCO (Mirpur branch)Azad Kashmir, Jarral PlazaBuilding No. 63/F,Sector F-1, Kotli Road,Mirpur AJKPh: (+92-058610) 39670-2 (+92-058610) 39669Fax: (+92-058610)39668


NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 13th Annual General Meeting of BSJS Balanced Fund Limited will be held at 10:00a.m. on Saturday, October 20, 2007 at Beach Luxury Hotel, M.T. Khan Road, Karachi, to transact the following business:

Ordinary Business

1. To confirm the Minutes of the Annual General Meeting held on September 30, 2006.

2. To receive, consider and adopt the audited financial statements of the company together with the reportof Directors and Auditors for the year ended June 30, 2007.

3. To approve interim cash dividends @ Rs. 2.50 per share as final dividend already paid to the shareholdersduring the year.

4. To appoint Auditors of the Company and fix their remuneration for the year ending June 30, 2008. In orderto comply with the requirements of the Rule 59 of the Non Banking Finance Companies (Establishment andRegulation) Rules, 2003, the Audit Committee of the Board has recommended the appointment of M. YousufAdil Saleem & Co., Chartered Accountants, as the auditors for the ensuing year ending June 30, 2008 in placeof the retiring auditors Messrs. Ford Rhodes Sidat Hyder & Co., Chartered Accountants.

5. To elect seven directors, as fixed by the Board of Directors, pursuant to section 178(1) of the CompaniesOrdinance, 1984, for the period of three years.

The Following retiring directors shall be eligible to offer themselves for re-election:

i. Mr. Nazar Mohammad Shaikhii. Mr. Muhammad Najam Aliiii. Mr. Munawar Alam Siddiquiiv. Mr. Adil Matcheswalav. Mr. Yousuf Amanuallahvi. Mr. Ali Hasan Hamdanivii. Mr. Aftab Ahmad Khan

Special Business

6. To consider and , if thought fit, pass the following resolutions as Special Resolution:

RESOLVED as Special Resolution that subject to the approval of the Registrar under section 39 of the CompaniesOrdinance, 1984, the name of the Company be and is hereby changed from BSJS Balanced Fund Limited toJS Value Fund Limited and the relevant provision of the Memorandum of Association and Articles of Associationof the Company be amended accordingly to reflect the above change in the name of the Company.

RESOLVED FURTHER that the Company Secretary be and is hereby authorized to fulfill all requisite legal,procedural and corporate formalities for effectuating the alteration of the Memorandum of Association andArticles of Association, including signing, swearing and submitting appropriate application with the Registrarof Companies for obtaining approval of the change of name as required by the Companies Ordinance, 1984.

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

By Order of the Board

Suleman LalaniKarachi: September 18, 2007 Company Secretary




Statement under section 160(1) of the Companies OrdinanceIn view of continued upsurge in the equity market as a result of privatization of state owned entities, foreign portfolioinvestment and non-availability of well diversified fixed income market, the board has proposed that the fund’s categorybe changed from balanced fund to equity fund with a new name.

Notes:

1. Any person who seeks to contest the election of director shall file with company not later than fourteen daysbefore the date of the meeting his/ her intention to offer himself/ herself for the election of directors in termsof section 178(3) of the Companies Ordinance, 1984 together with;a Consent to act as directors on Form 28.b A declaration with consent to act as director in the prescribed form under Clause (ii) of the Code of

Corporate Governance to the effect that he/she is aware of duties and powers of directors under theCompanies Ordinance, 1984, the Memorandum and Articles of Association of the Company and thelisting regulations of the Stock Exchange in Pakistan and has read the provisions contained therein.

c A declaration in terms of clause (iii) and (iv) of the Code of Corporate Governance to the effect that;i. He/ She is not serving as a director of more then ten other listed companies.ii. His/ Her name is borne in the register of national tax payers (except where he/she is a non-resident).iii. He/ She has not been convicted by a court of competent jurisdiction as defaulter in payment of any

loan to a banking company, a development financial institution or a non-banking financial institution.iv. He/ She and his / her spouse are not engaged in the business of stock brokerage.

2. The share transfer books of the Company will remain closed from Saturday, October 13, 2007 to Saturday,October 20, 2007 (both days inclusive). Transfer received at the transfer agent of the Company, M/S TechnologyTrade (Pvt.) Limited, Dagia House, 241-C, Block 2, P.E.C.H.S, Off. Sharah-e-Quaideen, Karachi at the close ofbusiness on or before Friday, October 12, 2007 will be considered in time to attend and vote at the meeting.

3. All the members are entitled to attend and vote at the meeting. A member entitled to attend and vote at themeeting is entitled to appoint another member as proxy to attend, speak and vote for him/ her. Copies ofthe instruments of proxy may be obtained from the transfer agent of the Company during normal officehours.

4. An instrument of proxy and power of attorney or other authority (if any) under which it is signed or a notariallycertified copy of such power of attorney, to be valid, be deposited with the transfer agent of the Companynot later than 48 hours before the scheduled time of the meeting.

5. Attested copies of CNIC or passport of the beneficial owner of the shares of the Company in the CentralDepositary system of the Central Depositary Company of Pakistan Limited (CDC) and the proxy, entitled toattend and vote at this meeting, shall be furnished with the proxy form to the Company.

6. The beneficial owner of the share of the company in the central depositary system of the CDC or his/herproxy entitled to attend and vote at this meeting, shall produce his/her original CNIC or passport to provehis/her identity.

7. In case of corporate entity, the board of directors' resolution/power of attorney with specimen signature ofthe nominee shall be submitted with the proxy form to the company, and the same shall be produced inoriginal at the time of the meeting to authenticate the identity.

8. Shareholders are requested to immediately notify the Company of the change in their addresses, if any.

9. Members are requested to submit copy of their computerized National Identity Cards with the SharesDepartment of the company Messrs Technology Trade (Pvt.) Limited.

THIRTEENTH 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 per registered Folio No. CDCA/c No. (for members who have shares in CDS)___________________________________________________________hereby appoint Mr. / Ms._________________________________________ of ______________________ or failinghim / her Mr. / Ms._______________________ of _____________________________ as my / our proxy in my / ourabsence to attend and vote for me / us and my / our behalf at the 13th Annual General Meeting of the Companyto be held at 10:00 a.m. on Saturday, October 20, 2007 at Beach Luxury Hotel, M.T. Khan Road, Karachi.

Witnesses:

1. Name ____________________________

Signature _________________________

Address __________________________

_________________________________

CNIC / Passport No._________________

2. Name ____________________________

Signature _________________________

Address __________________________

_________________________________

CNIC / Passport No._________________

Important:

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

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

3. If a member more than one proxies and more than one instruments of proxy are deposited by a memberwith the Company, all such instruments of proxy shall be rendered invalid.

4. Any individual beneficial owner of shares registered as book entry securities with Central Depository Companyof Pakistan Limited, entitled to attend and vote at this meeting, must bring his / her original CNIC or passport,account and participant ID number to prove his / her identity, and in case of proxy, must enclose an attestedcopy of his / her CNIC or passport. Representatives of corporate members should bring the usual documentsrequired for this purpose.

The Signature should agree with the specimen registered with the Company

Signature of Rs. 5/-Revenue Stamp


FORM OF PROXYBSJS BALANCED FUND LIMITED

The Company SecretaryBSJS Balanced Fund Limited7th Floor, The Forum, G-20Khayaban-e-Jami, Block-9, CliftonKarachi-75600

AFFIXCORRECTPOSTAGE

Documents

UTP-BSJS Fund Formated 22-9-7 · Karachi - 75530, Pakistan Legal Adviser Bawaney & Partners Room No.404, 4th floor, Beaumont Plaza, 6-Cl-10, Beaumont Road, Civil Lines Karachi-75530