ASA LIMITED 36 WIERDA ROAD WEST
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) WIERDA VALLEY, SANDTON
SOUTH AFRICA
TO THE SHAREHOLDERS:
At May 31, 1999 the Company's net assets were equivalent to R105.36
($16.97) per share. This compares with R108.18 ($19.01) per share at November
30, 1998 the end of the Company's previous fiscal year. Net asset values are
computed in terms of rand, the currency of the Republic of South Africa, and
then converted to United States dollars at the rand exchange rate as described
in Note (1)B, on page 7. The most recent net asset value similarly calculated
was R108.87 ($17.97) per share at June 17, 1999 at which date our shares sold at
a market price of $15.9375 per share, a discount of 11.3% to the net asset
value.
Net investment income for the six months ended May 31, 1999 was equivalent
to $.31 per share vs. $.40 for the same period last year. The Board of Directors
declared a dividend of $.15 per share on April 30, 1999 payable May 28, 1999 to
shareholders of record on May 21, 1999. The Company receives most of its
dividend income in the first and third quarters of the fiscal year.
The Bank of England has joined a growing list of government bodies,
including the Swiss National Bank and the International Monetary Fund ("IMF")
that have sold or are considering selling significant quantities of gold. The
Bank of England announced on May 6th that it would sell 415 tons of its 715 ton
gold reserve with the first 125 tons to be sold over twelve months starting in
July. This has contributed to a ten percent fall in the gold price and a five
percent decline in the Johannesburg Stock Exchange All Gold Index.
On Saturday, June 12th a group of seven leading industrial nations agreed
to the sale of 310 tons of gold by the IMF to finance debt reduction for some of
the world's poorest countries. The Swiss, subject to a successful referendum
next year, plan to sell a total of 1,300 tons of gold on a regular basis over
the next five years. The United States, Germany, France and Italy will hold the
largest remaining gold reserves and appear to have no intention of joining the
selling.
Total world demand for gold in 1998 was 4,123 tons and the sales noted
above, if carefully handled, should be readily absorbed. The prospect of these
sales, however, has encouraged speculators to sell the metal and may encourage
other central banks to emulate the example set by these major official sources.
This could keep pressure on the gold price, hurting the economies of a number of
gold producing countries targeted as beneficiaries of the IMF's plan.
In South Africa, some mines could suffer if downward pressure on the gold
price continues. This could result in job losses in gold mining and other
sectors dependent on gold mining and could negatively affect the government's
growth plans. We hope that concern over this harmful effect of a lower gold
price will cause the United States Congress to exercise their weighted voting
power to veto the IMF sales.
South Africa's second democratic election on June 2nd resulted in the
governing African National Congress ("ANC") gaining 266 of 400 seats in the
national assembly, just a bit short of its target of a two-thirds majority. The
Democratic Party became the official opposition with thirty-eight seats, up from
seven seats in the previous Parliament. The Inkatha Freedom Party won
thirty-four seats and the ANC won a majority in seven of the nine provinces,
losing by a slim margin in Natal and Western Cape.
Our portfolio reflects the combination of Gold Fields and Driefontein,
which took place on May 7th. It also reflects small purchases of Barrick Gold,
Placer Dome, and Euro Nevada Mining Corporation. The former Anglo American
Corporation of South Africa is now listed under its new corporate designation,
Anglo American PLC.
<PAGE>
We were pleased to note that in spite of the decline which took place in
gold shares since the announcement of the Bank of England's gold sales, our net
asset value increased slightly since the 1st quarter ended February 28th. This
reflects strong price action in Anglo American PLC, DeBeers, and in our platinum
stocks, Anglo American Platinum and Impala.
I would like to call to your attention the availability of the Dividend
Reinvestment Plan. Any inquiries in regard to the plan should be directed to
EquiServe-First Chicago Trust Division ("FCTD"), Dividend Reinvestment Plan,
P.O. Box 2598, Jersey City, NJ, 07303-2598, U.S.A. Also FCTDis now able to
communicate with shareholders through the Internet. The only requirement for
shareholder participation is use of a personal computer and access to an
electronic mail package. The FCTD address is "[email protected]", and access is
available 24-hours a day. In addition, FCTD has established a Response Center to
respond to shareholders' questions in a timely manner. The telephone number is
201-324-0498. The Response Center is available Monday through Friday between
8:30 a.m. and 7 p.m. (Eastern Standard Time).
ROBERT J.A. IRWIN
June 23, 1999 CHAIRMAN OF THE BOARD
2
<PAGE>
SCHEDULE OF INVESTMENTS
(AS REVISED, SEE NOTE 2)
May 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Number of South African United States Percent of
Name of Company Shares Rand Dollars Net Assets
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ORDINARY SHARES OF GOLD MINING COMPANIES
SOUTH AFRICAN GOLD MINES
Anglogold Limited 1 194 947 R 291 806 057 28.9%
Gold Fields Limited (Note 2) 10 794 979 211 581 588 20.9
Western Areas Gold Mining Company Limited 600 300 9 304 650 0.9
- -------------------------------------------------------------------------------------------------------------------
512 692 295 $ 82 559 147 50.7
- -------------------------------------------------------------------------------------------------------------------
CANADIAN GOLD MINES
Barrick Gold Corporation 282 000 29 333 640 2.9
Euro Nevada Mining Corporation Limited 398 000 31 020 120 3.1
Placer Dome Incorporated 365 312 24 669 519 2.5
- -------------------------------------------------------------------------------------------------------------------
85 023 279 13 691 349 8.5
- -------------------------------------------------------------------------------------------------------------------
OPTIONS
Randfontein options 78 039 191 195 30 788 --
- -------------------------------------------------------------------------------------------------------------------
597 906 769 96 281 284 59.2
- -------------------------------------------------------------------------------------------------------------------
ORDINARY SHARES OF OTHER COMPANIES
Anglo American Platinum Corporation Limited 1 014 800 117 716 800 11.6
Anglo American PLC 320 000 90 048 000 8.9
De Beers Consolidated Mines Limited/Centenary AG 1 001 300 133 573 420 13.2
Impala Platinum Holdings Limited 262 700 39 667 700 3.9
- -------------------------------------------------------------------------------------------------------------------
381 005 920 61 353 610 37.6
- -------------------------------------------------------------------------------------------------------------------
Total Investments, at Market Value 978 912 689 157 634 894 96.8
CASH AND OTHER ASSETS LESS PAYABLES 32 517 703 5 252 747 3.2
- -------------------------------------------------------------------------------------------------------------------
Total Net Assets (Note 2) R 1 011 430 392 $162 887 641 100.0%
===================================================================================================================
</TABLE>
The Company's accounts are maintained in rand, the currency of the Republic of
South Africa. United States dollar amounts are shown solely for the convenience
of United States shareholders. There is no assurance that the valuations at
which the Company's investments are carried could be realized upon sale. The
notes to the financial statements form an integral part of these statements.
3
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
(AS REVISED, SEE NOTE 2)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
May 31, 1999 May 31, 1998
South African United States South African United States
ASSETS Rand Dollars Rand Dollars
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments, at market value (Note 1)
Gold mining companies--(Note 2)
Cost R 191 775 236 $91 265 759 in 1999
R 125 014 358 $80 308 680 in 1998 R 597 906 769 $ 96 281 284 R 638 436 221 $123 968 199
Other companies--
Cost R 80 132 354 $34 342 056 in 1999
R 108 723 218 $49 164 650 in 1998 381 005 920 61 353 610 386 058 495 74 962 815
- -------------------------------------------------------------------------------------------------------------------
978 912 689 157 634 894 1 024 494 716 198 931 014
Cash in banks 29 202 912 4 702 562 4 458 338 865 697
Bank time deposit -- -- 5 665 000 1 100 000
Dividends and interest receivable 3 592 171 578 449 4 807 638 933 523
Other assets 549 920 104 957 510 366 100 602
- -------------------------------------------------------------------------------------------------------------------
Total assets (Note 2) 1 012 257 692 163 020 862 1 039 936 058 201 930 836
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Accounts payable and accrued liabilities 827 300 133 221 1 001 381 194 443
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 827 300 133 221 1 001 381 194 443
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS (SHAREHOLDERS' INVESTMENT)
- -------------------------------------------------------------------------------------------------------------------
Ordinary (common) shares R0.25 nominal (par) value
Authorized: 24,000,000 shares
Issued & outstanding: 9,600,000 shares 2 400 000 3 360 000 2 400 000 3 360 000
Share premium (capital surplus) 19 636 586 27 489 156 19 636 586 27 489 156
Undistributed net investment income 21 543 617 56 531 139 27 785 445 57 740 368
Undistributed net realized gain (loss) from
foreign currency transactions 3 920 469 (28 896 228) 2 494 235 (18 079 405)
Undistributed net realized gain on investments 249 152 048 72 836 263 189 058 602 62 175 213
Net unrealized appreciation on investments 707 045 368 32 027 010 790 757 107 69 457 683
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currency 7 732 304 (459 699) 6 802 702 (406 622)
- -------------------------------------------------------------------------------------------------------------------
Net assets (Note 2) R 1 011 430 392 $162 887 641 R 1 038 934 677 $201 736 393
- -------------------------------------------------------------------------------------------------------------------
Net asset value per share (Note 2) R 105.36 $16.97 R 108.22 $21.01
===================================================================================================================
</TABLE>
The closing price of the Company's shares on the New York Stock Exchange
was $16.5625 per share on May 31, 1999 and $22.25 per share on May 31,
1998.
The notes to the financial statements form an integral part of these
statements.
4
<PAGE>
STATEMENTS OF OPERATIONS
(AS REVISED, SEE NOTE 2)
<TABLE>
<CAPTION>
Six months ended
- -------------------------------------------------------------------------------------------------------------------
May 31, 1999 May 31, 1998
South African United States South African United States
Rand Dollars Rand Dollars
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Dividends R 23 387 943 $ 3 791 825 R 23 502 975 $ 4 772 189
Interest 1 340 420 218 916 615 773 123 407
- -------------------------------------------------------------------------------------------------------------------
24 728 363 4 010 741 24 118 748 4 895 596
- -------------------------------------------------------------------------------------------------------------------
Expenses
Shareholders' report and proxy expenses 384 436 64 704 691 204 138 807
Directors' fees and expenses 1 356 796 223 599 878 409 175 650
Salaries 945 609 156 929 960 897 193 582
Other administrative expenses 1 040 347 173 473 864 913 174 783
Transfer agent, registrar and custodian 364 453 59 334 276 184 54 680
Professional fees and expenses 519 125 85 383 308 503 61 021
Insurance 248 758 41 154 297 907 59 979
Other 1 208 484 198 724 1 221 400 243 916
- -------------------------------------------------------------------------------------------------------------------
6 068 008 1 003 300 5 499 417 1 102 418
- -------------------------------------------------------------------------------------------------------------------
Net investment income 18 660 355 3 007 441 18 619 331 3 793 178
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) from
investments and foreign currency transactions
Net realized gain from investments
Proceeds from sales 68 886 627 11 384 059 -- --
Cost of securities sold 27 106 338 3 819 287 -- --
- -------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 41 780 289 7 564 772 -- --
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from foreign currency
transactions
Investments -- (9 630 594) -- --
Foreign currency transactions (307 736) (169 073) 73 413 (54 264)
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from foreign currency
transactions (307 736) (9 799 667) 73 413 (54 264)
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in unrealized appreciation
on investments
Balance, beginning of period 778 778 375 49 646 548 705 737 193 63 834 015
Balance, end of period 707 045 368 32 027 010 790 757 107 69 457 683
- -------------------------------------------------------------------------------------------------------------------
Increase (Decrease) (71 733 007) (17 619 538) 85 019 914 5 623 668
- -------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currency 2 293 500 85 096 521 099 (86 923)
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) from
investments and foreign currency transactions (27 966 954) (19 769 337) 85 614 426 5 482 481
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (Note 2) R (9 306 599) ($16 761 896) R 104 233 757 $9 275 659
===================================================================================================================
</TABLE>
The notes to the financial statements form an integral part of these
statements.
5
<PAGE>
STATEMENTS OF SURPLUS AND STATEMENTS OF CHANGES IN NET ASSETS
(AS REVISED, SEE NOTE 2)
<TABLE>
<CAPTION>
Six months ended
- ----------------------------------------------------------------------------------------------------------------------
May 31, 1999 May 31, 1998
South African United States South African United States
STATEMENTS OF SURPLUS Rand Dollars Rand Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Share premium (capital surplus)
Balance, beginning and end of period R 19 636 586 $27 489 156 R 19 636 586 $27 489 156
- ----------------------------------------------------------------------------------------------------------------------
Undistributed net investment income
Balance, beginning of period R 20 681 662 $56 403 698 R 28 481 314 $57 787 190
Net investment income for the period 18 660 355 3 007 441 18 619 331 3 793 178
- ----------------------------------------------------------------------------------------------------------------------
39 342 017 59 411 139 47 100 645 61 580 368
Dividends paid (17 798 400) (2 880 000) (19 315 200) (3 840 000)
- ----------------------------------------------------------------------------------------------------------------------
Balance, end of period R 21 543 617 $56 531 139 R 27 785 445 $57 740 368
Undistributed net realized gain (loss) from
foreign currency transactions
Balance, beginning of period R 4 228 205 $(19 096 561) R 2 420 822 $(18 025 141)
Net realized gain (loss) for the period (307 736) (9 799 667) 73 413 (54 264)
- ----------------------------------------------------------------------------------------------------------------------
Balance, end of period R 3 920 469 $(28 896 228) R 2 494 235 $(18 079 405)
- ----------------------------------------------------------------------------------------------------------------------
Undistributed net realized gain on investments
(Computed on identified cost basis)
Balance, beginning of period R 207 371 759 $65 271 491 R 189 058 602 $62 175 213
Net realized gain for the period 41 780 289 7 564 772 -- --
- ----------------------------------------------------------------------------------------------------------------------
Balance, end of period R 249 152 048 $72 836 263 R 189 058 602 $62 175 213
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on
investments
Balance, beginning of period R 778 778 375 $49 646 548 R 705 737 193 $63 834 015
Increase (Decrease) for the period (71 733 007) ( 17 619 538) 85 019 914 5 623 668
- ----------------------------------------------------------------------------------------------------------------------
Balance, end of period R 707 045 368 $32 027 010 R 790 757 107 $69 457 683
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currency
Balance, beginning of period R 5 438 804 $ (544 795) R 6 281 603 $ (319 699)
Net unrealized appreciation (depreciation)
for the period 2 293 500 85 096 521 099 (86 923)
- ----------------------------------------------------------------------------------------------------------------------
Balance, end of period R 7 732 304 $ (459 699) R 6 802 702 $ (406 622)
======================================================================================================================
Six months ended
- ----------------------------------------------------------------------------------------------------------------------
May 31, 1999 May 31, 1998
South African United States South African United States
STATEMENTS OF CHANGES IN NET ASSETS Rand Dollars Rand Dollars
- ----------------------------------------------------------------------------------------------------------------------
Net investment income R 18 660 355 $ 3 007 441 R 18 619 331 $ 3 793 178
Net realized gain from investments 41 780 289 7 564 772 -- --
Net realized gain (loss) from foreign currency
transactions (307 736) (9 799 667) 73 413 (54 264)
Net increase (decrease) in unrealized appreciation
on investments (71 733 007) (17 619 538) 85 019 914 5 623 668
Net unrealized appreciation (depreciation)
on translation of assets and liabilities in
foreign currency 2 293 500 85 096 521 099 (86 923)
- ----------------------------------------------------------------------------------------------------------------------
(9 306 599) (16 761 896) 104 233 757 9 275 659
Dividends paid from net investment income (17 798 400) (2 880 000) (19 315 200) (3 840 000)
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (27,104,999) (19,641,896) 84 918 557 5 435 659
Net assets, beginning of period 1 038 535 391 182 529 537 954 016 120 196 300 734
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (Note 2) R 1 011 430 392 $162 887 641 R 1 038 934 677 $201 736 393
======================================================================================================================
</TABLE>
The notes to the financial statements form an integral part of these
statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--The following is a summary
of the Company's significant accounting policies:
A. INVESTMENTS
Security transactions are recorded on the respective trade dates.
Securities owned are reflected in the accompanying financial statements at
quoted market value. The difference between cost and current market value
is reflected separately as net unrealized appreciation on investments. The
net realized gain or loss from the sale of securities is determined for
accounting purposes on the basis of the cost of specific certificates.
Substantially all shares in the Company's portfolio are traded on the
Johannesburg Stock Exchange. The Company cannot trade in securities markets
other than the Johannesburg Stock Exchange without permission of the South
African Exchange Control Authorities.
Quoted market value of those shares traded on the Johannesburg Stock
Exchange or other stock exchanges, as applicable, represents the last
recorded sales price on the financial statement date, or the mean between
the closing bid and asked prices of those securities not traded on that
date. In the event that a mean price cannot be computed due to the absence
of either a bid or an asked price, then the bid price plus 1% or the ask
price less 1%, as applicable, is used.
There is no assurance that the valuation at which the Company's investments
are carried could be realized upon sale.
B. TRANSLATION OF SOUTH AFRICAN RAND INTO UNITED STATES DOLLARS
The Company's accounts are maintained in rand, the currency of the Republic
of South Africa. United States dollar amounts are shown solely for the
convenience of United States shareholders. The Company translates rand into
U.S. dollars at the current rand exchange rate in computing its net asset
values. At May 31, 1999, the rand exchange rate was approximately R6.21 to
the dollar ($.16 to the rand).
United States dollar equivalents have been determined at appropriate rates
of exchange as follows:
(i) Purchases, sales, receipts and expenditures are translated at
the approximate official rates of exchange in effect at the respective
dates of such transactions.
(ii) Assets, including investment securities, at quoted market
value (Note (1) A), and liabilities at each reporting date are
translated at the official exchange rate in effect at such date.
(iii) Ordinary shares outstanding and share premium (capital
surplus) accounts are translated at historical rates, averaging $1.40
to the rand.
C. EXCHANGE GAINS AND LOSSES
The Company adopted the provisions of the American Institute of Certified
Public Accountants Statement of Position 93-4, Foreign Currency Accounting
and Financial Statement Presentation for Investment Companies ("SOP")
effective for the fiscal year beginning December 1, 1994. The adoption of
the SOP resulted in the reclassification of net realized gain (loss) from
foreign currency transactions, previously included as a component of net
investment income, to net realized gain (loss) from foreign currency
transactions, and the inclusion of unrealized gain (loss) on the
translation of currency into net unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign currency.
7
<PAGE>
D. SECURITY TRANSACTIONS AND INVESTMENT INCOME
During the six months ended May 31, 1999 sales of securities amounted to R
68,886,627 ($11,384,059) and purchases of securities amounted to R
55,039,024 ($8,965,647). Securities transactions are accounted for on the
date the securities are purchased or sold. Dividend income is recorded on
the ex-dividend date (the date on which the securities would be sold
ex-dividend). Interest income is recognized on the accrual basis.
E. DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders are recorded on the ex-dividend date.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that effect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses for the period. Actual results could
differ from those estimates.
(2) REVISED FINANCIAL STATEMENTS--The accompanying financial statements
have been revised to correct the number of shares of Gold Fields Limited the
Company owns pursuant to certain merger transactions involving Gold Fields
Limited and Driefontein Consolidated Limited. The Company reported in its May
31, 1999 financial statements that it owned 9,312,493 shares, valued at
R182,524,862 ($29,392,087), while the Company should have recorded 10,794,979
shares valued at R211,581,588 ($34,071,109). As a result of this error, the
Company understated its total assets and net assets by R29,056,726 ($4,679,022),
overstated its net decrease in net assets resulting from operations by
R29,056,726 ($4,679,022), and understated its net asset value per share by R3.03
($.49).
(3) TAX STATUS OF THE COMPANY--There is no South African tax on dividends
received by the Company and it is exempt from tax on gains realized on the
disposition of securities, provided, as has been the Company's practice, that
its purchases of securities are made for investment purposes. Effective June
1992, the Company is no longer subject to tax on interest income. Exemption has
been granted to the Company from the payment of a Secondary Tax on Companies.
The Company (a South African corporation) intends to conduct its business in a
manner that will not subject it to United States income or capital gain taxes.
The reporting for financial statement purposes of distributions made during
the period from net investment income or net realized gains may differ from
their ultimate reporting for U.S. federal income tax purposes. These differences
primarily are caused by the separate line item reporting for financial statement
purposes of foreign exchange gains or losses. See page 10 for additional tax
information for United States shareholders.
(4) CURRENCY EXCHANGE--There are exchange control regulations restricting
the transfer of funds from South Africa. In 1958 the South African Reserve Bank,
in the exercise of its powers under such regulations, advised the Company that
the exchange control authorities would permit the Company to transfer to the
United States in dollars both the Company's capital and its gross income,
whether received as dividends or as profits on the sale of investments, at the
current official exchange rate prevailing from time to time. Future
implementation of exchange control policies could be influenced by national
monetary considerations that may prevail at any given time.
(5) RETIREMENT PLAN--Effective April 1, 1989, the Company established a
defined contribution plan (the "Plan") to replace its previous pension plan. The
Plan covers all full-time employees. The Company will contribute 15% of each
covered employee's salary to the Plan. The Plan provides for immediate vesting
by the employee without regard to length of service. During the six months ended
May 31, 1999, retirement plan expense aggregated R6,912 ($1,206), and in the six
months ended May 31, 1998, retirement plan expense aggregated R4,320 ($763). In
addition, in 1998 the Company renewed an annuity policy owned by the Company,
for the benefit of the Chairman, at an annual cost of $25,000 per year for five
years.
8
<PAGE>
FINANCIAL HIGHLIGHTS
(AS REVISED, SEE NOTE 2)
<TABLE>
<CAPTION>
Six months ended Year ended November 30
- -------------------------------------------------------------------------------------------------------------------------------
May 31 May 31
1999 1998 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------------
South African Rand
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period R 108.18 R 99.38 R 99.38 R 161.77 R 127.19 R 181.42 R 154.00
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income 1.94 1.93 3.59 4.43 4.52 5.17 5.74
Net realized gain from investments 4.35 -- 1.91 -- 1.50 2.39 .71
Net realized gain(loss) from foreign
currency transactions (.03) .01 .19 .11 (.12) .10 .17
Net increase(decrease) in unrealized
appreciation on investments (7.47) 8.86 7.61 (61.40) 34.03 (54.67) 27.93
Net unrealized appreciation (depreciation)
on translation of assets and
liabilities in foreign currency .24 .05 (.09) .02 .62 .01 .01
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.97) 10.85 13.21 (56.84) 40.55 (47.00) 34.56
Less dividends (1.85) (2.01) (4.41) (5.55) (5.97) (7.23) (7.14)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (Note 2) R 105.36 R 108.22 R 108.18 R 99.38 R 161.77 R 127.19 R 181.42
- -------------------------------------------------------------------------------------------------------------------------------
United States Dollars
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 19.01 $ 20.45 $ 20.45 $ 35.09 $ 34.66 $ 51.10 $ 45.70
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income .31 .40 .66 .97 1.10 1.43 1.62
Net realized gain from investments .79 -- .32 -- .39 .65 .20
Net realized (loss) from foreign
currency transactions (1.02) (.01) (.11) -- (.71) (.93) (.23)
Net increase(decrease) in unrealized
appreciation on investments (1.83) .58 (1.49) (14.41) 1.05 (15.58) 5.82
Net unrealized appreciation (depreciation)
on translation of assets and
liabilities in foreign currency .01 (.01) (.02) -- -- (.01) (.01)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.74) (.96) (.64) (13.44) 1.83 (14.44) 7.40
Less dividends (.30) (.40) (.80) (1.20) (1.40) (2.00) (2.00)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (Note 2) $ 16.97 $ 21.01 $ 19.01 $ 20.45 $ 35.09 $ 34.66 $ 51.10
- -------------------------------------------------------------------------------------------------------------------------------
Market value per share, end of period $ 16.56 $ 22.25 $ 19.13 $ 20.63 $ 37.63 $ 39.00 $ 43.63
TOTAL INVESTMENT RETURN
Based on market value per share (11.80%) 9.83% (3.30%) (42.86%) (.28%) (6.36%) (.29%)
RATIOS TO AVERAGE NET ASSETS
Expenses .60% .54% 1.15% .71% .49% .53% .42%
Net investment income 1.81% 1.85% 3.34% 3.25% 2.72% 3.47% 3.23%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $162,888 $201 736 $182 530 $196 301 $336 882 $332 691 $490 595
Portfolio turnover rate 5.65% -- 1.06% -- 1.79% 2.40% 1.18%
Per share calculations are based on the 9,600,000 shares outstanding.
--------------------------------
SUPPLEMENTARY INFORMATION
Six months ended May 31, 1999
- -------------------------------------------------------------------------------------------------------------------------------
South African Rand
- -------------------------------------------------------------------------------------------------------------------------------
Certain fees incurred by the company
Directors' fees R 611 433
Officers' salaries 573 150
Arthur Andersen (Auditors) 188 496
Ranquin Associates (South African Secretary) 290 700
</TABLE>
9
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the Board of
Directors of ASA Limited:
We have audited the accompanying statements of assets and liabilities of
ASA Limited (incorporated in the Republic of South Africa) as of May 31, 1999
and 1998, including the schedule of investments as of May 31, 1999, as revised,
see Note 2, the related statements of operations, surplus and changes in net
assets for the six months ended May 31, 1999 and 1998, as revised, see Note 2,
the financial highlights for the six month periods ended May 31, 1999 and 1998,
and for each of the five years in the period ended November 30, 1998 as revised,
see Note 2, and the accompanying supplementary information for the six months
ended May 31, 1999. These financial statements, financial highlights and
supplementary information are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements,
financial highlights and supplementary information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements, financial
highlights and supplementary information are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, financial highlights and supplementary
information. Our procedures included the physical examination or confirmation of
securities owned as of May 31, 1999 and 1998 by correspondence with the
custodians. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements, financial highlights and
supplementary information referred to above present fairly, in all material
respects, the financial position of ASA Limited as of May 31, 1999 and 1998, the
results of its operations and changes in its net assets for the six months ended
May 31, 1999 and 1998, its financial highlights for the six month periods ended
May 31, 1999 and 1998 and for each of the five years in the period ended
November 30, 1998 and its supplementary information for the six months ended May
31, 1999 in conformity with accounting principles generally accepted in the
United States.
Arthur Andersen & Co.
Johannesburg, South Africa
Arthur Andersen LLP
New York, N.Y., U.S.A.
September 15, 1999
----------------------
CERTAIN TAX INFORMATION FOR UNITED STATES SHAREHOLDERS
From December 1, 1963 through November 30, 1987, the Company was treated as
a "foreign investment company" for United States federal income tax purposes
pursuant to Section 1246 of the Internal Revenue Code (the "Code"). Under
Section 1246 of the Code, a United States shareholder who has held his shares of
the Company for more than one year is subject to tax at ordinary income tax
rates on his profit (if any) on a sale of his shares to the extent of his
"ratable share" of the Company's earnings and profits accumulated between
December 1, 1963 and November 30, 1987. If such shareholder's profit on the sale
of his shares exceeds such ratable share and he held his shares for more than
one year, then, subject to the discussion below regarding the United States
federal income tax rules applicable to taxable years of the Company beginning
after November 30, 1987, he is subject to tax at long term capital gain rates on
the excess.
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<PAGE>
The Company's per share earnings and profits accumulated (undistributed) in
each of the fiscal years from 1964 through 1987 is given below in United States
currency. All the per share amounts give effect to the two-for-one stock splits
that became effective on May 10, 1966, May 10, 1973 and May 9, 1975. All the per
share amounts reflect distributions through November 30, 1998.
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30 PER YEAR PER DAY YEAR ENDED NOVEMBER 30 PER YEAR PER DAY
- --------------------- ------- ------- --------------------- ------- -------
<S> <C> <C> <C> <C> <C>
1964 ................ $ .042 $.00012 1976 ................. .370 .00101
1965 ................ .067 .00019 1977 ................. .083 .00023
1966 ................ .105 .00029 1978 ................. .357 .00098
1967 ................ .277 .00076 1979 ................. .219 .00060
1968 ................ .241 .00066 1980 ................. 1.962 .00538
1969 ................ .461 .00126 1981 ................. .954 .00261
1970 ................ .218 .00060 1982 ................. .452 .00124
1971 ................ .203 .00056 1983 ................. -0- -0-
1972 ................ .445 .00122 1984 ................. -0- -0-
1973 ................ .497 ,00136 1985 ................. (.151) (.00041)
1974 ................ 1.151 .00316 1986 ................. -0- -0-
1975 ................ .851 .00233 1987 ................. -0- -0-
</TABLE>
Under rules enacted by the Tax Reform Act of 1986, the Company became a
"passive foreign investment company" (a "PFIC") on December 1, 1987. The manner
in which these rules apply depends on whether a United States shareholder elects
either to treat the PFIC as a qualified electing fund ("QEF") with respect to
his interest therein, or for taxable years of such United States shareholder
beginning after December 31, 1997, to "mark-to-market" his PFIC shares as of the
close of each taxable year.
In general, if a United States shareholder of the Company does NOT make
either such election, any gain realized on the direct or indirect disposition of
Company stock by the United States shareholder will be treated as ordinary
income. In addition, such non-electing United States shareholder will be subject
to an "interest charge" on part of his tax liability with respect to such gain,
as well as with respect to certain "excess distributions" made by the Company.
Furthermore, shares held by such non-electing United States shareholder may be
denied the benefit of any otherwise applicable increase in tax basis at death.
If the United States shareholder elects to treat the Company as a QEF with
respect to his interest therein for the first year he holds his shares during
which the Company is a PFIC (or who later makes the QEF election and also elects
to treat his interest generally as if it were sold on the first day of the first
taxable year of the Company for which the QEF election is effective), the rules
described in the preceding paragraph generally will not apply. Instead, the
electing United States shareholder would include annually in his gross income
his pro rata share of the Company's ordinary earnings and not capital gain (his
"QEF" inclusion) regardless of whether such income or gain was actually
distributed. A United States shareholder who made the QEF election for the first
year he held his shares during which the Company was a PFIC (or who later made
the election and also elected to treat his interest generally as if it were sold
on the first day of the first taxable year of the Company for which the QEF
election is effective) would recognize capital gain on any profit from the
actual sale of his shares if those shares were held as capital assets, except to
the extent of the shareholder's ratable share of the earnings and profits of the
Company accumulated between December 1, 1963 and November 30, 1987, as described
above.
Alternatively, if the United States shareholder makes the mark-to-market
election with respect to regularly-traded PFIC stock for taxable years beginning
on or after January 1, 1998, such electing United States shareholder would be
required annually to report any unrealized gain with respect to such
shareholder's stock as an item of ordinary income, and any unrealized loss would
be permitted as an ordinary loss, but only to the extent of previous inclusions
of ordinary income. Any gain subsequently realized by the electing United States
shareholder on a sale or other disposition of the PFIC stock also would be
treated as ordinary income, but such United States shareholder would not be
subject to an interest charge on his resulting tax liability. Special rules
would apply to a United States shareholder that held his PFIC stock prior to the
first taxable year for which the mark-to-market election was effective.
A more detailed discussion of the United States federal income tax rules
applicable to PFICs, including information relating to the filing of QEF
elections, may be found in the Company's 1998 Annual Report under the heading
"Certain tax information for United States shareholders."
DUE TO THE COMPLEXITY OF THE APPLICABLE TAX RULES, UNITED STATES
SHAREHOLDERS OF THE COMPANY ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE IMPACT OF THESE RULES ON THEIR INVESTMENT IN THE COMPANY AND ON
THEIR INDIVIDUAL SITUATIONS.
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ASA LIMITED
Incorporated in the
Republic of South Africa
(Registration No. 58/01920/06)
DIRECTORS
HENRY R. BRECK ROBERT J.A. IRWIN
(U.S.A.) (U.S.A)
HARRY M. CONGER MALCOLM W. MACNAUGHT
(U.S.A.) (U.S.A)
CHESTER A. CROCKER RONALD L. MCCARTHY
(U.S.A.) (South Africa)
JOSEPH C. FARRELL ROBERT A. PILKINGTON
(U.S.A.) (Great Britain)
JAMES G. INGLIS A. MICHAEL ROSHOLT
(SOUTH AFRICA) (South Africa)
- -------------------------------------------
WESLEY A. STANGER, JR., DIRECTOR EMERITUS
OFFICERS
ROBERT J.A. IRWIN, CHAIRMAN OF THE BOARD AND TREASURER
RONALD L. MCCARTHY, MANAGING DIRECTOR
CHESTER A. CROCKER, UNITED STATES SECRETARY
RANQUIN ASSOCIATES, SOUTH AFRICAN SECRETARY
HENRY R. BRECK, ASSISTANT TREASURER
AUDITORS
ARTHUR ANDERSEN & CO., JOHANNESBURG, SOUTH AFRICA
ARTHUR ANDERSEN LLP, NEW YORK, N.Y., U.S.A.
COUNSEL
WERKSMANS, JOHANNESBURG, SOUTH AFRICA,
SHEARMAN & STERLING, NEW YORK, N.Y., U.S.A.
CUSTODIAN
THE CHASE MANHATTAN BANK, N.A. NEW YORK, N.Y., U.S.A.
SHAREHOLDER SERVICES
LGN ASSOCIATES, FLORHAM PARK, NJ, USA (973) 377-3535
WEBSITE--HTTP://WWW.ASALTD.COM
SUBCUSTODIAN
STANDARD BANK OF SOUTH AFRICA LIMITED, JOHANNESBURG, SOUTH AFRICA
TRANSFER AGENT
EQUISERVE-FIRST CHICAGO TRUST DIVISION, JERSEY CITY, N.J.,
U.S.A.
ASA LIMITED
[LOGO OMITTED]
INTERIM
REPORT
FOR THE
SIX MONTHS
ENDED
MAY 31, 1999
