| 8th ICP Mutual Fund |
|
|
|
|
|
|
|
|
|
|
| 21st
Annual Report 1997 |
|
|
| INVESTMENT
CORPORATION OF PAKISTAN |
|
|
| HEAD
OFFICE |
|
MUTUAL FUNDS DEPTT: |
|
| N.B.P.
Building, 5th Floor, |
|
Dawood Centre, Ground
Floor, |
|
| P.O.
Box No. 5410, |
|
Moulvi Tamizuddin Khan
Road, Karachi |
|
| I.I.
Chundrigar Road Karachi. |
|
Phones 5686014-15
5685104-105 |
|
| Phones:
2415860-10 Lines Telex: 20009 ICP PK |
Telex: 20079 ICP PK.
29223 ICP PK. |
|
| 29223
ICP PK. Telefax: 92-021-2411684 |
|
Telefax: 92-021-5680035 |
|
|
|
|
|
| Balance
Sheet as at 30th June, 1997 |
|
|
|
|
1997 |
1996 |
|
| NET
ASSETS |
|
Note |
Rupees |
Rupees |
|
|
| Investment
in quoted shares |
|
| [Market
value Rs. 226,605,334 |
|
| (1996:
Rs. 207,175,753)] |
|
3 |
59,676,834 |
36,058,957 |
|
|
| Current
Assets |
|
|
| Dividend
receivable |
|
617,934 |
548,334 |
|
| Prepaid
expense |
|
7,500 |
1,250 |
|
| Current account with the |
|
| Investment
Corporation of Pakistan (ICP) |
|
14,572,733 |
5,121,073 |
|
|
--------- |
--------- |
|
|
15,198,167 |
5,670,657 |
|
| Current
Liabilities |
|
|
| Accured
expense |
|
45,967 |
6,263 |
|
| Taxation
- net |
|
156,108 |
156,108 |
|
| Unclaimed
dividend |
|
21,433,456 |
5,298,395 |
|
| Proposed
dividend |
|
-- |
12,500,000 |
|
|
--------- |
--------- |
|
|
21,635,531 |
17,960,766 |
|
|
--------- |
--------- |
|
|
(6,437,364) |
(12,290,109) |
|
|
--------- |
--------- |
|
|
53,239,470 |
23,768,848 |
|
|
======= |
======= |
|
|
| FINANCED
BY |
|
| Capital
and Reserves |
|
| Capital |
|
| Authorised |
|
| 5,000,000 certificates
(1996: 5,000,000) of |
|
| Rs. 10/- each |
|
50,000,000 |
50,000,000 |
|
|
======= |
======= |
|
| Issued,
Subscribed and Paid-up |
|
| 5,000,000 certificates
(1996: 1,000,000) of |
|
| Rs.
10/- each fully paid in cash |
|
50,000,000 |
50,000,000 |
|
|
| Reserves |
|
| Revenue |
|
| Special |
|
125,000 |
125,000 |
|
|
| Unappropriated
income |
|
3,114,470 |
13,643,848 |
|
|
-------- |
-------- |
|
|
53,239,470 |
23,768,848 |
|
|
======= |
======= |
|
| The
annexed notes form an integral part of these accounts. |
|
| The
auditors' report is annexed hereto. |
|
|
| for
THE INVESTMENT CORPORATION OF PAKISTAN |
|
|
|
| Income
and Expenditure Account for the year ended 30th June, 1997 |
|
|
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
| Dividend |
|
5,695,422 |
3,660,894 |
|
| Return
on current account with the ICP |
|
2,085,863 |
386,857 |
|
| Profit
on sale of investment |
|
11,807,847 |
11,860,940 |
|
|
---------- |
---------- |
|
|
19,589,132 |
15,908,691 |
|
| EXPENDITURE |
|
|
| Management
fee |
|
4 |
4,086,582 |
50,000 |
|
| Auditor's
remuneration |
|
5 |
9,565 |
9,214 |
|
| Expenses
incurred in respect of issue of right certificates |
|
6 |
731,748 |
208,740 |
|
| Other
expenses |
|
7 |
290,615 |
140,916 |
|
|
--------- |
--------- |
|
|
5,118,510 |
408,870 |
|
|
--------- |
--------- |
|
| INCOME
BEFORE TAXATION |
|
14,470,622 |
15,499,821 |
|
|
| TAXATION |
|
|
| Current |
|
8 |
-- |
314,306 |
|
| Prior |
|
-- |
95,231 |
|
|
--------- |
--------- |
|
|
-- |
409,537 |
|
|
--------- |
--------- |
|
| NET
INCOME FOR THE YEAR |
|
14,470,622 |
15,090,284 |
|
|
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
|
13,643,848 |
18,553,564 |
|
|
|
--------- |
--------- |
|
| AVAILABLE
FOR APPROPRIATION |
|
28,114,470 |
33,643,848 |
|
|
|
|
| Interim
dividend @ 50% (1996: 75%) on 500,00 |
|
| (1996:
1,000,000) Certificates of Rs. 10/-each) |
|
25,000,000 |
7,500,000 |
|
|
| Final
proposed dividend Nil (1996: 25%) |
|
| on
5,000,000 certificates of Rs. 10/- each |
|
-- |
12,500,000 |
|
|
--------- |
--------- |
|
|
25,000,000 |
20,000,000 |
|
| UNAPROPRIATED
INCOME CARRIED FORWARD |
|
--------- |
--------- |
|
| TO
REVENUE RESERVE |
|
3,114,470 |
13,643,848 |
|
|
======= |
======= |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| Cash
Flow Statement for the year ended 30th June, 1997 |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
9 |
540,766 |
2,703,690 |
|
| Sales
of investment |
|
17,054,100 |
14,805,850 |
|
| Purchase
of investment |
|
(28,864,140) |
(2,723,491) |
|
| Taxes paid |
|
-- |
(312,457) |
|
|
--------- |
--------- |
|
| Net
cash (outflow)/inflow operating activities |
|
(11,269,274) |
14,473,592 |
|
|
--------- |
--------- |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Return
on current account with the ICP |
|
2,085,863 |
386,857 |
|
|
--------- |
--------- |
|
| Net
cash inflow from investing activities |
|
2,085,863 |
386,857 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Issue
of right certificates |
|
40,000,000 |
-- |
|
| Dividend paid |
|
(21,364,929) |
(13,047,500) |
|
|
--------- |
--------- |
|
| Net
cash inflow/(outflow) from financing activities |
|
18,635,071 |
(13,047,500) |
|
|
--------- |
--------- |
|
| NET
INCREASE IN CASH EQUIVALENT |
|
9,451,660 |
1,812,949 |
|
| CASH EQUIVALENT AT THE BEGINNING
OF |
|
| THE YEAR |
|
5,121,073 |
3,308,124 |
|
|
--------- |
--------- |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
|
10 |
14,572,733 |
5,121,073 |
|
|
======= |
======= |
|
| Notes
to the Accounts for the year ended 30th June, 1997 |
|
|
| 1.
THE FUND AND ITS OPERATIONS |
|
| In
order to broaden the investment base and to encourage investment in shares of
companies |
|
| quoted
on the stock exchanges in the country the Eight ICP Mutual Fund was
established by the |
|
| Investment
Corporation of Pakistan (ICP) , acting as its Trustees, on May 17, 1976 under
the ICP |
|
| Ordinance,
1996. The Fund is listed on the three Stock Exchange in Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention without any
adjustment for |
|
| the
effect of inflation. |
|
|
| 2.2
Investments |
|
| i)
Investments are valued at average cost where cost is lower than the market
value; |
|
| ii)
in cases where market value is lower than carrying value, the carrying value
is reduced to recognise other than |
|
| temporary
decline i.e. for a period not less than three years, in order to arrive at
there book value; |
|
| iii)
profit or loss on sale of investments is accounted for in the year in which
it arises. |
|
|
| 2.3 Taxation |
|
|
| Provision
for taxation is based on taxable income at the current rates for taxation
after taking into account tax credits |
|
| available,
if any |
|
|
| 2.4
Revenue recognition |
|
| i)
Dividend income is accounted for at the closure of share transfer books of
the company declaring dividend; |
|
| ii)
return on current account with ICP is accounted for on the basis of the PLS
rate declared half yearly by a bank on |
|
| PLS
bank accounts. |
|
|
|
|
| 3. INVESTMENTS IN QUOTED
SHARES |
|
| Unless
stated otherwise the holdings are in the ordinary shares of Rs. 10/- each. |
|
|
| 1996 |
1997 |
|
1997 |
|
1996 |
|
| *Holding |
Name of the country |
|
Book Value |
Market Value |
Book Value |
Market Value |
| No of shares |
|
|
**Rate |
Amount |
**Rate |
Amount |
**Rate |
Amount |
**Rate |
Amount |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
LEASING |
|
|
| -- |
26,000 |
PILC |
|
13.83 |
354.38 |
13.50 |
351.000 |
-- |
-- |
-- |
-- |
|
|
|
|
|
INVESTMENT BANKS |
|
|
| -- |
115,000 |
Askari Commercial |
|
19.57 |
2,251,000 |
28.50 |
3,277,500 |
-- |
-- |
-- |
-- |
|
|
|
|
|
CEMENT |
|
|
| -- |
50,000 |
Cherat Cement |
|
20.51 |
1,025,500 |
20.75 |
1,037,500 |
-- |
-- |
-- |
-- |
| -- |
50,000 |
Pakland Cement Limited |
|
13.01 |
650,500 |
9.70 |
485,000 |
-- |
-- |
-- |
-- |
|
FUEL & ENERGY |
|
|
| 36,908 |
236,908 |
Karachi Electric Supply
Corporation. |
18.97 |
4,494,868 |
12.25 |
2,902,123 |
7.94 |
292,868 |
36.50 |
1,347,147 |
| -- |
115,000 |
Sui Northern Gas
Pipelines Limited |
37.31 |
4,291,000 |
3,175 |
3,651,250 |
-- |
-- |
-- |
-- |
| 2,915,085 |
3,153,847 |
Sui Southern Gas Company
Ltd. |
|
5.39 |
17,000,900 |
28.25 |
89,096,178 |
6.20 |
18,070,815 |
32.25 |
94,011,491 |
|
TRANSPORT |
|
|
| -- |
125,000 |
P.T.C.L. 'A' |
|
31.50 |
3,937,500 |
30.50 |
3,812,500 |
-- |
-- |
-- |
-- |
|
|
|
: |
|
|
CHEMICAL &
PHARMACEUTICAL |
|
|
|
|
| -- |
10,000 |
BOC Pakistan Limited |
|
149.01 |
1,490,100 |
139.00 |
1,390,000 |
-- |
-- |
-- |
-- |
| -- |
4,800 |
Dawood Hercules |
|
139.33 |
668,800 |
140.50 |
674.400 |
-- |
-- |
-- |
-- |
| 507,936 |
572,420 |
Engro Chemicals |
|
14.83 |
8,548,497 |
142.00 |
81,283,640 |
18.67 |
9,481,997 |
157.00 |
79,745,952 |
| 35,000 |
100,000 |
Fauji Fertilizer |
|
68.66 |
6,866,400 |
78.75 |
7,875,000 |
49.45 |
1,730,750 |
89.75 |
3,141,250 |
| 148,000 |
481,000 |
ICI Pakistan |
|
10.00 |
4,810,000 |
24.20 |
11,640,200 |
21.22 |
3,139,863 |
53.00 |
7,844,000 |
|
|
|
|
PAPER AND BOARD |
|
|
| 87,304 |
97,780 |
Packages Limited |
|
13.53 |
1,322,669 |
62.00 |
6,062,360 |
15.15 |
1,322,669 |
90.00 |
7.857,360 |
|
LEATHER & TANNERIES |
|
|
| 274,167 |
266,667 |
Service Industries |
|
7.37 |
1,964,720 |
49.00 |
13,066,683 |
7.37 |
2,019,995 |
48.25 |
13,228,556 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
---------- |
|
|
|
59,676,834 |
|
226,605,334 |
|
36,058,957 |
|
207,175,753 |
|
======== |
|
======== |
|
======== |
|
======== |
|
|
| *The
above shares are held in the name of the Investment Corporation of Pakistan
which acts as a Trustee to the fund.
' |
|
| **Rounded
off to two decimal places. |
|
|
| 4.
MANAGEMENT FEE |
|
| The
management fee is payable to Investment Corporation of Pakistan @ 1/2% per
annum on the initial paid-up capital of the |
|
| fund.
The management fee in respect of the additional capital raised by way of
right issue in August 1996 is payable upto 3°,~ |
|
| per
annum of the net assets market value of the fund to be determined of the
close of the financial year. |
|
|
|
|
|
1997 |
1996 |
|
|
|
Note |
Rupees |
Rupees |
|
| Management
fee @ 1/2% per annum of the initial |
|
| paid-up
capital of Rs. 10 million |
|
|
50,000 |
50,000 |
|
|
| Management
fee @ 3% per annum of the market |
|
, |
|
| value
of net assets at the close of the year |
|
4.1 |
4,036,582 |
-- |
|
' |
|
|
---------- |
---------- |
|
: |
|
|
|
|
4,086,582 |
50,000 |
|
|
|
|
======= |
======= |
|
| 4.1
Market value of net assets at the close of the year |
|
| Investment
in quoted shares |
|
3 |
226,605,334 |
|
| Current
assets |
|
- |
|
|
|
|
|
· |
|
| Dividend
receivable |
|
|
617,934 |
|
;~ :: |
|
| Prepaid
expense |
|
|
7,500 |
|
| Due
from the ICP |
|
|
18,659,315 |
|
|
---------- |
|
|
|
19,284,749 |
|
|
---------- |
|
|
245,890,083 |
|
|
|
|
|
| Current
liabilities |
|
| Accrued
expenses |
|
45,967 |
|
|
| Taxation
- net |
|
156,108 |
|
|
| Unclaimed
dividend |
|
21,433,456 |
|
|
|
---------- |
|
|
|
21,635,531 |
|
|
|
---------- |
|
|
|
224,254,552 |
|
|
40,000,000 |
9 |
|
|
| 224,254,552 x |
-------------- |
x'-----------x |
|
3% |
4,036,582 |
|
|
|
50,000,000 |
12 |
|
|
======== |
|
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
Taseer Hadi |
Ford Rhodes |
1997 |
1996 |
|
|
Khalid & Co. |
Robson Morrow |
Rupees |
Rupees |
|
|
| Audit Fee |
|
2,195 |
2,195 |
4,390 |
4,180 |
|
| Tax services |
|
5,175 |
-- |
5,175 |
5,034 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
|
7,370 |
2,195 |
9,565 |
9,214 |
|
|
======== |
======== |
======== |
======== |
|
|
|
|
| 6.
EXPENSES INCURRED IN RESPECT OF ISSUE OF RIGHT CERTIFICATES |
|
|
| Commission |
|
|
| Banks |
|
|
202,245 |
-- |
|
| ICP - take up |
|
|
49,965 |
-- |
|
| -
underwriting |
|
|
200,000 |
-- |
|
| Consultancy
services |
|
113,726 |
39,560 |
|
| Advertising |
|
|
22,824 |
6,600 |
|
| Postage |
|
|
22,827 |
13,530 |
|
| Stamp duty |
|
|
100,000 |
11,118 |
|
| Stock
exchange listing fee |
|
-- |
137,143 |
|
| Professional
charges |
|
-- |
789 |
|
| Printing
charges |
|
20,161 |
-- |
|
|
--------- |
--------- |
|
|
731,748 |
208,740 |
|
|
======= |
======= |
|
|
| 7.
OTHER EXPENSES |
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| Printing
and stationery |
|
35,590 |
20,201 |
|
| Advertising
and publicity |
|
18,946 |
5,365 |
|
| Professionals
charges |
|
17,517 |
3,257 |
|
| Stock
Exchange Listing fee |
|
35,000 |
13,750 |
|
| Excise duty |
|
8,200 |
7,400 |
|
| Computer
related expenses |
|
126,400 |
50,552 |
|
| Postage |
|
23,071 |
20,712 |
|
| Professional
tax |
|
19,000 |
19,000 |
|
| Share
transfer stamps |
|
5,400 |
-- |
|
| Miscellaneous |
|
1,491 |
679 |
|
|
--------- |
--------- |
|
|
290,615 |
140,916 |
|
|
======= |
======= |
|
| 8.
TAXATION |
|
| In
accordance with the amendments introduced in the Finance Act, 1997 to the
Income-tax Ordinance, 1979, no provision for |
|
| taxation
in respect of the current year has been made as the Fund has already
distributed more than 90% of its income. |
|
|
| The
income-tax assessment of the Fund has been finalised upto and including
assessment year 1996-97. However, the Fund |
|
| has
filed appeals before the Commissioner of income-tax (Appeal) relating to
assessment years 1993-94, 1994-95, 1995-96 |
|
| and
1996-97. In case of any adverse decision in respect of appeal for the above
referred assessment years, no material tax |
|
| liability
is expected to arise. |
|
|
|
|
|
1997 |
1996 |
|
|
|
Note |
Rupees |
Rupees |
|
| 9.
CASH GENERATED FROM OPERATIONS |
|
|
| Profit
before taxation |
|
|
14,470,622 |
15,499,821 |
|
|
| Adjustment
for non cash charges and other items: |
|
| Return
on current account with the ICP |
|
|
(2,085,863) |
(386,857) |
|
| Profit
on sale of Investment |
|
|
(11,807,847) |
(11,860,940) |
|
| Working
capital changes |
|
9.10 |
(36,146) |
(548,334) |
|
|
--------- |
--------- |
|
| 9.1
Working capital changes |
|
540,766 |
2,703,690 |
|
| (Increase)/decrease
in current assets |
|
| Dividend
receivable |
|
|
(69,600) |
(548,334) |
|
| Prepaid
expense |
|
|
(6,250) |
-- |
|
|
| (Decrease)/Increase
in current liabilities |
|
(75,850) |
(548,334) |
|
| Accrued
expenses |
|
|
39,704 |
-- |
|
|
--------- |
--------- |
|
|
|
|
(36,146) |
(548,334) |
|
|
|
======= |
======= |
|
| 10.
CASH EQUIVALENT |
|
|
|
| Current
account with the ICP |
|
14,572,733 |
5,121,073 |
|
|
|
|
======= |
======= |
|
| 11.
TRANSACTIONS WITH THE ICP |
|
| 11.1
Underwriting and take-up commission |
|
249,965 |
-- |
|
|
|
|
======= |
======= |
|
| 11.2
All transactions pertaining to the Mutual Fund are handled by the ICP |
|
| Purchase
of shares |
|
-- |
-- |
|
|
======= |
======= |
|
| Sale
of shares |
|
-- |
-- |
|
|
|
-------- |
-------- |
|
|
|
|
-- |
10,849,600 |
|
|
|
|
======= |
======= |
|
| 11.3
Maximum amount due from the ICP at the end of any month during the year was |
|
| Rs.
23.788million (1996: Rs. 5.121million.) |
|
|
| 12.
GENERAL |
|
| 12.1
Figures have been rounded off to the nearest rupee. |
|
| 12.2
Figures have been rearranged, wherever necessary, for the purposes of
comparison. |
|
|
| for
THE INVESTMENT CORPORATION OF PAKISTAN |
|
|
|
|
| Pattern
of holding of the Certificates held by the Certificate-holders as at 30th
June, 1997. |
|
|
| NO.
OF CERTIFICATE |
C E R T I F I C A T E S |
|
|
TOTAL CERTIFICATES |
|
| HOLDERS |
|
|
|
H E L D |
|
|
HELD |
|
|
|
1067 |
From |
1 |
to |
100 |
Certs |
39,600 |
|
|
1071 |
From |
101 |
to |
500 |
Certs |
349,450 |
|
|
155 |
From |
501 |
to |
1000 |
Certs |
136,700 |
|
|
191 |
From |
1001 |
to |
5000 |
Certs |
465,650 |
|
|
23 |
From |
5001 |
to |
10000 |
Certs |
162,000 |
|
|
6 |
From |
10001 |
to |
15000 |
Certs |
72,750 |
|
|
4 |
From |
15001 |
to |
20000 |
Certs |
72,250 |
|
|
1 |
From |
20001 |
to |
25000 |
Certs |
25,000 |
|
|
2 |
From |
25001 |
to |
30000 |
Certs |
55,500 |
|
|
1 |
From |
45001 |
to |
50000 |
Certs |
50000 |
|
|
1 |
From |
65001 |
to |
70000 |
Certs |
66500 |
|
|
1 |
From |
75001 |
to |
80000 |
Certs |
80000 |
|
|
5 |
From |
85001 |
to |
Above |
Certs |
3,424,600 |
|
|
----------- |
|
|
|
|
|
--------- |
|
| TOTAL |
2528 |
|
5,000,000 |
|
|
======== |
|
======= |
|
|
|
|
|
| CATEGORIES
OF |
|
NUMBERS |
CERTIFICATES |
PERCENTAGE |
|
| CERTIFICATES
HOLDERS |
|
HELD |
% |
|
|
| Individuals |
