| FIRST ICP MUTUAL FUND |
|
|
|
|
|
|
|
|
|
|
| 31ST
ANNUAL REPORT-1998 |
|
|
| INVESTMENT
CORPORATION OF PAKISTAN |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1998 |
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
| NET ASSETS |
|
|
|
|
|
|
| Investment
in quoted shares |
|
|
| [Market
value Rs.40,214,771 (1997:Rs.76,913,267)] |
3 |
53,318,339 |
42,772,814 |
|
|
|
|
|
|
| Long
term deposit |
|
|
100,000 |
- |
|
|
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
|
| Dividend
receivable |
|
648,125 |
178,750 |
|
| Prepaid
expenses |
|
20,000 |
7,500 |
|
| Current
account with the Investment Corporation |
|
| of
Pakistan (ICP) |
|
5,988,726 |
12,827,626 |
|
|
|
---------- |
---------- |
|
|
|
6,656,851 |
13,013,876 |
|
| Current
liabilities |
|
|
| Accrued
expenses |
|
48,159 |
45,988 |
|
| Unclaimed
dividend |
|
3,898,498 |
3,921,106 |
|
| Taxation
- net |
|
68,785 |
4,784 |
|
|
|
|
---------- |
---------- |
|
|
|
4,015,442 |
3,971,878 |
|
|
|
---------- |
---------- |
|
|
|
2,641,409 |
9,041,998 |
|
|
|
---------- |
---------- |
|
|
|
56,059,748 |
51,814,812 |
|
|
|
========== |
========== |
|
| FINANCED BY |
|
|
|
|
| Capital
and Reserves |
|
|
|
| Capital |
|
|
|
|
| Authorised |
|
|
|
|
| 5,000,000
Certificates of Rs. I0/- each |
|
50,000,000 |
50,000,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
| 5,000,000
Certificates of Rs. 10/- each fully paid in cash |
50,000,000 |
50,000,000 |
|
| Revenue
reserve |
|
|
|
| Unappropriated
income |
|
|
6,059,748 |
1,814,812 |
|
|
|
|
|
---------- |
---------- |
|
|
|
56,059,748 |
51,814,812 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| The
auditors' report is annexed hereto. |
|
|
|
for the Investment Corporation of Pakistan |
|
|
| ASADULLAH
KHAWAJA |
SYED MUZAFAR ALI SHAH |
SHAUKAT TAREEN |
|
| Managing
Director |
Director |
|
Director |
|
|
|
|
| INCOME
AND EXPENDITURE ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
|
|
|
| Dividend |
|
|
4,082,858 |
2,530,250 |
|
| Return
on current account with the ICP |
|
1,021,302 |
1,312,702 |
|
| Profit
on sale of investment |
|
|
8,646,550 |
5,054,203 |
|
| Other
income |
|
|
5,020 |
- |
|
|
|
|
|
|
|
|
|
13,755,730 |
8,897,155 |
|
|
|
|
| EXPENDITURE |
|
|
|
|
|
|
| Management
fee |
|
4 |
1,217,695 |
1,802,086 |
|
| Auditors'
remuneration |
|
5 |
12,130 |
9,565 |
|
| Provision
for diminution in the value of investment |
- |
733,000 |
|
| Expenses
incurred in respect of issue of Right certificates |
6 |
- |
973,553 |
|
| Other
expenses |
|
7 |
270,969 |
244,597 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,500,794 |
3,762,801 |
|
|
|
|
---------- |
---------- |
|
| INCOME
BEFORE TAXATION |
|
|
12,254,936 |
5,134,354 |
|
| TAXATION |
|
|
|
|
|
|
| Current |
|
|
|
8 |
510,000 |
- |
|
|
|
|
---------- |
---------- |
|
| NET
INCOME FOR THE YEAR |
|
11,744,936 |
5,134,354 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
|
1,814,812 |
4,180,458 |
|
|
|
|
---------- |
---------- |
|
| AVAILABLE
FOR APPROPRIATION |
|
13,559,748 |
9,314,812 |
|
| Interim
dividend @ 15% (1997: 15%) |
|
7,500,000 |
7,500,000 |
|
|
|
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
|
---------- |
---------- |
|
| TO
REVENUE RESERVE |
|
|
6,059,748 |
1,814,812 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
|
|
| ASADULLAH
KHAWAJA |
SYED MUZAFAR ALI SHAH |
SHAUKAT TAREEN |
|
| Managing
Director |
Director |
|
Director |
|
|
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operations |
9 |
2,107,380 |
(643,785) |
|
| Sale
of investment |
|
|
11,480,500 |
6,381,000 |
|
| Purchase
of investment |
|
|
(13,379,475) |
(35,735,196) |
|
| Taxes paid |
|
|
(445,999) |
- |
|
|
|
|
---------- |
---------- |
|
| Net
cash outflow from operating activities |
(237,594) |
(29,997,981) |
|
|
---------- |
---------- |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Return
on current account with the ICP |
1,021,300 |
1,312,700 |
|
| Long
term deposit |
|
|
(100,000) |
- |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow from investing activities |
921,300 |
1,312,702 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Issue
of Right certificates |
|
- |
45,000,000 |
|
| Dividend
paid |
|
|
(7,522,608) |
(5,605,908) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from financing activities |
(7,522,608) |
39,394,092 |
|
|
|
|
---------- |
---------- |
|
| NET
(DECREASE)/INCREASE IN CASH EQUIVALENT |
(6,838,900) |
10,708,813 |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
12,827,626 |
2,118,813 |
|
|
|
|
|
---------- |
---------- |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
10 |
5,988,726 |
12,827,626 |
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
| 1.
THE FUND AND ITS OPERATIONS |
|
|
|
| in
order to broaden the base and to encourage investment in shares of companies
quoted on the stock exchanges in the country, the First |
|
| ICP
Mutual Fund was established by the Investment Corporation of Pakistan (ICP),
acting as its trustee, on June 15, 1967 under the ICP |
|
| Ordinance,
1966. The Fund is listed on three stock exchanges 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
Investment |
|
|
|
| (i)
Investment is valued at average cost where cost is lower than the market
value, determined on the basis of the average of |
|
| the
highest and the lowest quotation on the balance sheet date; |
|
|
| (ii)
in cases where market value is lower than carrying value, the carrying value
is reduced to rocognise other than temporary |
|
| decline,
i.e., for a period not less than three years, in order to arrive at their
book value; |
|
|
|
|
| (iii)
profit or loss on sale of investment 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.
INVESTMENT IN QUOTED SHARES |
|
| Unless
stated otherwise, the holdings are in the Ordinary shares of Rs. 10/- each. |
|
|
| 1997 |
1998 |
|
|
1998 |
|
1997 |
|
| *Holding |
Name of the company |
|
Book value |
Market value |
Book value |
Market value |
| No. of shares |
|
**Rate |
Amount |
**Rate |
Amount |
**Rate |
Amount |
**Rate |
Amount |
|
|
Rupees |
|
Rupees |
|
Rupees |
|
Rupees |
|
|
MODARABAS |
|
| 50000 |
79000 |
F.G. Modaraba |
|
10.15 |
802,525 |
10.75 |
849,250 |
10.38 |
519,000 |
11.50 |
575,000 |
|
|
|
|
LEASING |
|
|
| 35000 |
35000 |
Orix Leasing Company
Limited |
49.53 |
1,733,800 |
30.00 |
1,050,000 |
49.54 |
1,733,800 |
40.75 |
1,426,250 |
|
|
|
|
INVESTMENT BANKS |
|
|
| 55000 |
63250 |
Bank Al Habib Limited |
|
22.31 |
1,411,250 |
23.00 |
1,454,750 |
25.66 |
1,411,250 |
28.50 |
1,567,500 |
|
|
|
|
SUGAR AND ALLIED
INDUSTRIES |
|
| 35500 |
35500 |
Dewan Sugar Mills Ltd. |
|
26.07 |
925,600 |
19.00 |
674,500 |
26.07 |
925,600 |
27.00 |
958,500 |
| 139081 |
139081 |
Mirpurkhas Sugar Mills
Ltd. |
16.37 |
2,277,902 |
12.25 |
1,703,742 |
16.38 |
2,277,902 |
16.50 |
2,294,837 |
|
|
|
|
|
CEMENT |
|
|
|
| 24256 |
24256 |
Cherat Cement Company
Ltd. |
7.38 |
179,189 |
10.20 |
247,411 |
7.39 |
179,189 |
20.75 |
503,312 |
| 30000 |
30000 |
Dadabhoy Cement Industries Ltd. |
8.00 |
240,000 |
3.50 |
105,000 |
8.00 |
240,000 |
8.00 |
240,000 |
| 50000 |
50000 |
Lucky Cement Company Ltd. |
13.32 |
666,275 |
3.90 |
195,000 |
13.33 |
666,275 |
7.85 |
392,500 |
| 50000 |
50000 |
Pakland Cement Ltd. |
|
13.01 |
650,500 |
4.10 |
205,000 |
13.01 |
650,500 |
9.70 |
485,000 |
|
|
|
|
FUEL AND ENERGY |
|
|
| 100000 |
160000 |
The Hub Power Company
Ltd. |
44.54 |
7,127,750 |
12.37 |
1,979,200 |
32.95 |
3,295,250 |
40.80 |
4,080,000 |
| 73000 |
83000 |
Mari Gas Limited |
|
22.58 |
1,874,600 |
17.50 |
1,452,500 |
23.09 |
1,685,800 |
21.75 |
1,587,750 |
| 73829 |
65594 |
Pakistan State Oil
Company Ltd. |
4.65 |
305,057 |
73.75 |
4,837,558 |
5.58 |
412,007 |
325.50 |
24,031,340 |
| 111780 |
128547 |
Sui Northern Gas
Pipelines Ltd. |
5.25 |
675,000 |
8.85 |
1,137,641 |
6.04 |
675,000 |
31.75 |
3,549,015 |
| 25000 |
25000 |
Shell Pakistan Ltd. |
|
141.16 |
3,529,150 |
146.50 |
3,662,500 |
141.17 |
3,529,150 |
238.00 |
5,950,000 |
| - |
12500 |
Shell Pakistan Ltd. (RP) |
130.00 |
1,625,000 |
202.00 |
2,525,000 |
- |
- |
- |
- |
| 157427 |
181041 |
Sui Southern Gas Company
Ltd. |
5.59 |
1,013,530 |
9.00 |
1,629,369 |
6.44 |
1,013,530 |
28.25 |
4,447,313 |
|
|
AUTO AND ALLIED
ENGINEERING |
|
| 50000 |
50000 |
Pak Suzuki Motors Company
Ltd. |
43.42 |
2,171,300 |
34.00 |
1,700,000 |
43.43 |
2,171,300 |
50.00 |
2,500,000 |
|
|
|
|
|
CABLES & ELECTRICAL |
|
|
|
| 27500 |
21175 |
Phillips Electrical Industries |
70.61 |
1,495,305 |
34.09 |
721,856 |
77.68 |
2,136,150 |
57.50 |
1,581,250 |
|
of Pakistan Ltd. |
|
|
|
| - |
8250 |
Refrigeration Manufacturing |
77.67 |
640,845 |
12.00 |
99,000 |
- |
- |
- |
- |
|
Company |
|
|
|
|
|
|
|
TRANSPORT AND
COMMUNICATION |
|
|
|
| 100000 |
100000 |
P.T.C.L. 'A" |
33.24 |
3,324,250 |
15.77 |
1,577,000 |
33.24 |
3,324,250 |
30.50 |
3,050,000 |
|
|
|
|
|
CHEMICAL AND
PHARMACEUTICAL |
|
|
| 24800 |
24800 |
BOC Pakistan Limited |
|
144.83 |
3,591,811 |
90.00 |
2,232,000 |
144.83 |
3,591,811 |
139.00 |
3,447,200 |
| 62500 |
71875 |
Engro Chemicals
(Pakistan) Ltd. |
97.88 |
7,035,550 |
51.25 |
3,683,594 |
112.57 |
7,035,550 |
142.00 |
8,875,000 |
| 50000 |
100000 |
F.F.C. Jordan Fertilizer
Ltd. |
81.68 |
8,168,750 |
51.37 |
5,137,000 |
13.43 |
671,500 |
15.40 |
770,000 |
| 50000 |
50000 |
Fauji Fertilizer bad. |
|
13.43 |
671,500 |
12.97 |
648,500 |
73.50 |
3,675,000 |
78.75 |
3,937,500 |
| 2500 |
2500 |
Wah Noble Chemical. |
|
21.80 |
54,500 |
16.00 |
40,000 |
21.80 |
54,500 |
24.50 |
61,250 |
|
Company lad. |
|
|
|
|
PAPER AND BOARD |
|
| 10000 |
17000 |
Cherat Papersack Company
Ltd. |
40.11 |
681,900 |
28.00 |
476,000 |
45.30 |
453,000 |
31.40 |
314,000 |
| 16500 |
16500 |
Century Paper Board
Company |
27.00 |
445,500 |
11.60 |
191,400 |
27.00 |
445,500 |
17.50 |
288,750 |
|
Limited |
|
|
---------- |
|
---------- |
|
---------- |
|
---------- |
|
|
|
53,318,339 |
|
40,214,771 |
|
42,772,814 |
|
76,913,267 |
|
========== |
|
========== |
|
========== |
|
========== |
|
| *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 is
payable upto 3% per annum of the net assets market |
|
| value
of the Fund to be determined at the close of the financial year. |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Management
fee @ 1/2% per annum of the initial |
|
| paid-up
capital of Rs.5 million |
|
25,000 |
25,000 |
|
|
|
|
| Management
fee @ 3% per annum of the market |
|
| value
of net assets at the close of the year |
4.1 |
* 1,192,695 |
1,777,086 |
|
|
|
---------- |
---------- |
|
|
|
1,217,695 |
1,802,086 |
|
|
|
========== |
========== |
|
|
|
|
|
| 4.1
Market value of net assets at the close of the year |
|
| Investment
in quoted shares |
|
3 |
40,214,771 |
76,913,267 |
|
| Long
term deposit |
|
|
100,000 |
- |
|
|
|
|
| Current
assets |
|
|
|
|
|
|
| Dividend
receivable |
|
648,125 |
178,750 |
|
| Prepaid
expenses |
|
20,000 |
7,500 |
|
| Current
account with the ICP |
|
7,206,421 |
14,629,712 |
|
|
|
---------- |
---------- |
|
|
|
7,874,546 |
14,815,962 |
|
|
|
---------- |
---------- |
|
|
|
48,189,317 |
91,729,229 |
|
|
|
|
========== |
========== |
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
|
48,159 |
45,988 |
|
| Unclaimed
dividend |
|
|
3,898,498 |
3,921,106 |
|
| Taxation
- net |
|
|
68,785 |
4,784 |
|
|
|
---------- |
---------- |
|
|
|
4,015,442 |
3,971,878 |
|
|
|
---------- |
---------- |
|
|
|
44,173,875 |
8,775,735 |
|
|
|
========== |
========== |
|
|
|
|
|
| 1998: |
(44,173,875 |
x |
45,000,000 |
) |
@3% = |
* 1,192,695 |
|
|
|
|
50,000,000 |
|
========== |
|
|
|
| 1997: |
(87,757,351 |
x |
45,000,000 |
x 9 ) |
@3% = |
* 1,777,086 |
|
|
|
|
50,000,000 |
12 |
|
========== |
|
|
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
Ford, Rhodes, |
|
|
|
Taseer Hadi |
Robson, |
1998 |
1997 |
|
|
Khalid & Co. |
Morrow |
Rupees |
Rupees |
|
|
|
|
| Audit fee |
|
2,565 |
2,565 |
5,130 |
4,390 |
|
| Tax
services |
|
7,000 |
- |
7,000 |
5,175 |
|
|
|
---------- |
---------- |
---------- |
---------- |
|
|
9,565 |
2,565 |
12,130 |
9,565 |
|
|
|
|
|
========== |
========== |
========== |
========== |
|
|
| 6.
EXPENSES INCURRED IN RESPECT OF 1SSUE OF RIGHT CERTIFICATES |
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| Commission |
|
|
|
|
|
|
|
| Banks |
|
|
|
- |
173,393 |
|
|
|
| Trustee
- take up |
|
|
|
- |
225,000 |
|
|
|
|
- underwriting |
|
|
- |
211,522 |
|
|
|
| Consultancy
services |
|
|
|
- |
123,530 |
|
|
|
| Advertising |
|
|
|
- |
95,286 |
|
|
|
| Postage |
|
|
|
- |
32,322 |
|
|
|
| Stamp duty |
|
|
|
- |
112,500 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
- |
973,553 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| 7.
OTHER EXPENSES |
|
|
|
|
|
| Printing
and stationery |
|
36,112 |
22,768 |
|
|
|
| Advertising
and publicity |
|
17,276 |
13,848 |
|
|
|
| Professional
charges |
|
12,818 |
17,255 |
|
|
|
| Listing
fee - stock exchanges |
|
46,250 |
35,000 |
|
|
|
|
- Central Depository
Company |
|
12,500 |
- |
|
|
|
| Computer
related expenses |
|
48,098 |
111,300 |
|
|
|
| Postage |
|
|
39,386 |
5,361 |
|
|
|
| Professional
tax |
|
38,000 |
10,000 |
|
|
|
| Share
transfer stamps |
|
11,075 |
26,295 |
|
|
|
| Bank
charges |
|
|
5,163 |
|
|
|
| Excise duty |
|
|
|
1,300 |
1,300 |
|
|
|
| Miscellaneous |
|
|
2,991 |
1,470 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
270,969 |
244,597 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| 8. TAXATION |
|
|
|
| The
income-tax assessment of the Fund has been finalised upto and including
assessment year 1997-98. However, the Fund has flied |
|
| 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 appeals for the above referred assessment
years., no material tax liability is expected to arise. |
|
|
|
|
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 9.
CASH GENERATED FROM OPERATIONS |
|
|
| Income
before taxation |
|
|
12,254,936 |
5,134,354 |
|
| Adjustment
for non cash charges and other items: |
|
| Provision
for diminution in the value of investment |
|
733,000 |
|
| Profit
on sale of investment |
|
|
(8,646,550) |
(5,054,203) |
|
| Return
on current account with the ICP |
|
(1,021,302) |
(1,312,702) |
|
| Working
capital changes |
|
9.1 |
(479,704) |
(144,234) |
|
|
|
|
---------- |
---------- |
|
|
|
|
2,107,380 |
(643,785) |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 9.1
Working capital changes |
|
|
|
|
|
|
| Increase
in current assets |
|
|
|
|
|
|
| Dividend
receivable |
|
(469,375) |
(178,750) |
|
| Prepaid
expenses |
|
(12,500) |
(6,250) |
|
|
|
---------- |
---------- |
|
|
|
|
|
(481,875) |
(185,000) |
|
|
|
|
|
| Increase
in current liabilities |
|
|
| Accrued
expenses |
|
2,171 |
40,766 |
|
|
|
---------- |
---------- |
|
|
|
(479,704) |
(144,234) |
|
|
|
|
========== |
========== |
|
