| Third ICP Mutual Fund |
|
|
|
|
|
|
|
|
|
|
| 29th
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 |
|
3 |
64,572,989 |
49,582,285 |
|
| [market
value Rs. 61,986,472(1997: Rs. 100,890,456)] |
|
|
|
|
|
|
| Long
term deposit |
|
|
|
100,000 |
- |
|
| Current
assets |
|
|
|
| Dividend
receivable |
|
|
|
638,500 |
60,000 |
|
| Prepaid
expenses |
|
|
|
20,000 |
7,500 |
|
| Current
account with the Investment Corporation |
|
| of
Pakistan (ICP) |
|
|
|
- |
11,131,577 |
|
|
|
|
---------- |
---------- |
|
|
|
|
658,500 |
11,199,077 |
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
|
|
59,832 |
55,213 |
|
| Unclaimed
dividend |
|
|
|
6,862,821 |
7,026,560 |
|
| Current
account with the Investment Corporation |
|
| of
Pakistan (ICP) |
|
|
|
989,456 |
- |
|
| Taxation
- net |
|
|
|
470,707 |
395,955 |
|
|
|
|
---------- |
---------- |
|
|
|
|
8,382,816 |
7,477,728 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(7,724,316) |
3,721,349 |
|
|
|
|
---------- |
---------- |
|
|
|
|
56,948,673 |
53,303,634 |
|
|
|
|
========== |
========== |
|
| FINANCED BY |
|
|
|
| Capital
and Reserves |
|
|
| Capital |
|
|
| Authorised |
|
|
|
| 5,000,000
Certificates of Rs. 10/- 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 |
|
|
6,948,673 |
3,303,634 |
|
|
|
---------- |
---------- |
|
|
|
|
56,948,673 |
53,303,634 |
|
|
|
|
========== |
========== |
|
|
|
|
| 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 |
|
|
|
3,388,688 |
2,889,536 |
|
| Return
on current account with the ICP |
|
590,923 |
789,939 |
|
| Profit
on sale of investment |
|
9,524,170 |
8,343,077 |
|
| Other
income |
|
|
18,584 |
- |
|
|
|
---------- |
---------- |
|
|
|
13,522,365 |
12,022,552 |
|
|
|
|
|
| EXPENDITURE |
|
|
|
| Management
fee |
|
4 |
1,098,288 |
1,532,954 |
|
| Auditors'
remuneration |
|
5 |
12,130 |
9,565 |
|
| Provision
for diminution in the value of investment |
1,591,820 |
- |
|
| Expenses
incurred in respect of issue of Right certificates |
6 |
- |
712,174 |
|
| Other
expenses |
|
7 |
325,088 |
363,953 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,027,326 |
2,618,646 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
10,495,039 |
9,403,906 |
|
| INCOME
BEFORE TAXATION |
|
|
|
|
| TAXATION |
|
|
|
| Current |
|
8 |
350,000 |
363,788 |
|
|
|
|
---------- |
---------- |
|
| NET
INCOME FOR THE YEAR |
|
|
10,145,039 |
9,040,118 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
|
3,303,634 |
763,516 |
|
|
|
|
|
---------- |
---------- |
|
| AVAILABLE
FOR APPROPRIATION |
|
|
13,448,673 |
9,803,634 |
|
| Interim
dividend @ 13% (1997: 13%) |
|
|
6,500,000 |
6,500,000 |
|
|
|
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
|
---------- |
---------- |
|
| TO
REVENUE RESERVE |
|
6,948,673 |
3,303,634 |
|
|
|
|
========== |
========== |
|
|
| 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 |
1,385,385 |
252,757 |
|
| Sale
of investment |
|
|
|
14,194,000 |
12,142,966 |
|
| Purchase
of investment |
|
|
|
(21,252,354) |
(25,961,290) |
|
| Taxes paid |
|
|
|
|
(275,248) |
- |
|
|
|
|
|
|
---------- |
---------- |
|
| Net
cash outflow from operating activities |
|
(5,948,217) |
(13,565,567) |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Return
on current account with the ICP |
|
590,923 |
789,938 |
|
| Long
term deposit |
|
|
|
(100,000) |
- |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow from investing activities |
|
490,923 |
789,938 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
| Issue
of Right certificates |
|
|
- |
30,000,000 |
|
| Dividend
paid |
|
|
(6,663,739) |
(10,292,548) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from financing activities |
(6,663,739) |
19,707,452 |
|
|
|
|
---------- |
---------- |
|
| NET
(DECREASE)/INCREASE IN CASH EQUIVALENT |
|
(12,121,033) |
6,931,823 |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
|
11,131,577 |
4,199,754 |
|
|
|
|
|
---------- |
---------- |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
10 |
(989,456) |
11,131,577 |
|
|
|
|
========== |
========== |
|
|
|
| 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 Third ICP Mutual Fund was established by the Investment Corporation of
Pakistan (ICP), acting as its |
|
| trustee,
on May 08, 1969 under the 1CP 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. |
|
|
| 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 1owe~t quotation on the balance sheet date; |
|
|
|
|
| (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 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 |
|
|
| 1998 |
1997 |
|
|
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 |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
MODARABAS |
|
| 50000 |
54000 |
F.G. Modaraba |
|
9.61 |
519,000 |
10.75 |
580,500 |
10.38 |
519,000 |
11.50 |
575,000 |
|
|
|
|
LEASING |
|
|
| 25000 |
25000 |
Orix Leasing Company
Limited |
49.30 |
1,232,500 |
30.00 |
750,000 |
49.30 |
1,232,500 |
40.75 |
1,018,750 |
|
|
|
|
INVESTMENT BANKS |
|
|
| 55000 |
63250 |
Bank AI Habib Limited |
|
22.27 |
1,409,000 |
23.00 |
1,454,750 |
25.62 |
1,409,100 |
28.50 |
1,567,500 |
|
|
|
|
TEXTILE COMPOSITE |
|
|
| 32000 |
32000 |
Burewala Textile Mills
Ltd. |
3.90 |
988,800 |
25.00 |
800,000 |
30.90 |
988,800 |
27.00 |
864,000 |
|
|
SYNTHETIC & RAYON |
|
| 22800 |
26220 |
Dewan Salman Fibre Ltd. |
14.00 |
367,080 |
13.55 |
355,281 |
85.92 |
1,958,900 |
35.30 |
804,840 |
|
|
|
|
SUGAR |
|
|
| 93321 |
104986 |
Habib Sugar Mills Ltd. |
|
7.07 |
742,510 |
7.50 |
787,395 |
7.96 |
742,510 |
11.50 |
1,073,192 |
| 55425 |
55425 |
Mirpurkhas Sugar Mills
Ltd. |
15.31 |
848,843 |
12.25 |
678,956 |
15.32 |
848,843 |
16.50 |
914,513 |
| 169156 |
186071 |
Shahtaj Sugar Mills Ltd. |
11.95 |
2,224,779 |
20.27 |
3,771,659 |
13.15 |
2,224,779 |
22.40 |
3,789,094 |
|
|
|
|
CEMENT |
|
|
| 30000 |
30000 |
Lucky Cement Company Ltd. |
13.38 |
401,400 |
3.90 |
117,000 |
13.38 |
401,400 |
7.85 |
235,500 |
|
|
FUEL AND ENERGY |
|
| 100000 |
- |
The Hub Power Company
Ltd. |
|
|
32.85 |
3,284,700 |
40.80 |
4,080,000 |
| 229159 |
179159 |
Karachi Electric Supply |
9.16 |
1,642,223 |
8.42 |
1,508,519 |
9.16 |
2,100,223 |
12.25 |
2,807,198 |
|
Corporation Ltd. |
|
|
| 48000 |
48000 |
National Refinery Limited |
11.68 |
560,920 |
15.50 |
744,000 |
11.69 |
560,920 |
28.50 |
1,368,000 |
| 41516 |
99819 |
Pakistan State Oil
Company |
159.78 |
15,949,839 |
73.75 |
7,361,651 |
10.81 |
448,839 |
325.50 |
13,513,458 |
|
Limited. |
|
|
| 69231 |
66731 |
Shell Pakistan Ltd. |
|
80.64 |
5,381,446 |
146.50 |
9,776,092 |
46.69 |
3,232,222 |
238.00 |
16,476,978 |
| - |
8115 |
Shell Pakistan Ltd. (RP) |
130.00 |
1,054,950 |
202.00 |
1,639,230 |
- |
- |
- |
- |
| 416132 |
478551 |
Sui Southern Gas Company
Ltd. |
4.86 |
2,325,780 |
9.00 |
4,306,959 |
5.59 |
2,325,780 |
28.25 |
11,755,729 |
|
|
AUTO AND ALLIED
ENGINEERING |
|
| 50000 |
50000 |
Pak Suzuki Motors Company |
43.28 |
2,164,000 |
34.00 |
1,700.00 |
43.28 |
2,164,000 |
50.00 |
2,500,000 |
|
Limited. |
|
|
|
|
|
|
|
CABLES & ELECTRICAL |
|
|
|
| 22000 |
16940 |
Phillips Electrical
Industries |
71.32 |
1,208,270 |
34.09 |
577,485 |
78.46 |
1,726,100 |
57.50 |
1,265,000 |
|
of Pakistan Ltd. |
|
|
| - |
6600 |
Refrigeration
Manufacturing |
78.45 |
517,830 |
12.00 |
79,200 |
- |
- |
- |
- |
|
Company. |
|
|
|
TRANSPORT AND
COMMUNICATION |
|
| 100000 |
100000 |
P.T.C.L. "A" |
|
33.15 |
3,315,500 |
15.77 |
1,577,000 |
33.16 |
3,315,500 |
30.50 |
3,050,000 |
|
|
|
CHEMICAL AND
PHARMACEUTICAL |
|
| 10000 |
10000 |
BOC Pakistan Limited |
|
149.01 |
1,490,100 |
90.00 |
900,000 |
149.01 |
1,490,100 |
139.00 |
1,390,000 |
| 31250 |
35937 |
Engro Chemicals
(Pakistan) Ltd. |
98.93 |
3,555,400 |
51.25 |
1,841,771 |
113.77 |
3,555,400 |
142.00 |
4,437,500 |
| 50000 |
50000 |
F.F.C. Jordan Fertilizer
Ltd. |
13.43 |
671,500 |
12.97 |
648,500 |
13.43 |
671,500 |
15.40 |
770,000 |
| 100000 |
100000 |
Fauji Fertilizer Ltd. |
|
63.88 |
6,388,000 |
51.37 |
5,137,000 |
63.88 |
6,388,000 |
78.75 |
7,875,000 |
| 101620 |
186620 |
ICI Pakistan Ltd. |
|
14.14 |
2,640,330 |
11.62 |
2,168,524 |
10.04 |
1,020,280 |
24.20 |
2,459,204 |
|
|
|
|
PAPER AND BOARD |
|
|
| 200000 |
225000 |
Packages Ltd. |
|
16.87 |
3,797,939 |
36.00 |
8,100,000 |
18.99 |
3,797,839 |
62.00 |
12,400,000 |
|
|
|
|
FOOD & ALLIED |
|
|
| 5000 |
5000 |
Lever Brothers (Pak) |
|
635.01 |
3,175,050 |
925.00 |
4,625,000 |
635.01 |
3,175,050 |
780.00 |
3,900,000 |
|
---------- |
|
---------- |
|
---------- |
|
---------- |
|
|
64,572,989 |
|
61,986,472 |
|
49,582,285 |
|
100,890,456 |
|
========== |
|
========== |
|
========== |
|
========== |
|
| *
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. |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Management
fee @ 1/2% per annum of the initial |
|
| paid-up
capital of Rs.20 million |
|
|
100,000 |
100,000 |
|
|
|
|
| Management
fee @ 3% per annum of the market |
|
| value
of net assets at the close of the year |
4.1 |
* 998,288 |
1,432,954 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,098,288 |
1,532,954 |
|
|
|
|
========== |
========== |
|
|
|
|
| 4.1
Market value of net assets at the close |
|
| of the year |
|
|
|
|
|
|
|
| Investment
in quoted shares |
|
3 |
61,986,472 |
100,890,456 |
|
| Long
term deposit |
|
|
100,000 |
- |
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
|
| Dividend
receivable |
|
|
|
638,500 |
60,000 |
|
| Prepaid
expenses |
|
|
20,000 |
7,500 |
|
| Current
account with the ICP |
|
|
108,832 |
12,664,531 |
|
|
|
|
---------- |
---------- |
|
|
|
|
767,332 |
12,732,031 |
|
|
|
|
---------- |
---------- |
|
|
|
|
62,853,804 |
113,622,487 |
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
|
59,832 |
55,213 |
|
|
| Unclaimed
dividend |
|
|
6,862,821 |
7,026,560 |
|
| Taxation
- net |
|
|
470,707 |
395,955 |
|
|
|
|
---------- |
---------- |
|
|
|
|
7,393,360 |
7,477,728 |
|
|
|
|
---------- |
---------- |
|
|
|
|
55,460,444 |
106,144.76 |
|
|
|
|
========== |
========== |
|
|
| 1998: |
(55,460,444 |
x |
30,000,000) |
|
@ 3% = |
* 998,288 |
|
|
|
|
|
|
|
50,000,000 |
|
|
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1997: |
(6,526,320 |
x |
30,000,000 |
x 9 ) |
@ 3% = |
* 1,432,954 |
|
|
|
|
|
50,000,000 |
12 |
|
========== |
|
|
|
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
Ford, Rhodes, |
|
|
|
Taseer Hadi |
Robson, |
1998 |
1997 |
|
|
Khalid |
Morrow |
Rupees |
Rupees |
|
|
|
& Co. |
|
| 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 ISSUE OF RIGHT CERTIFICATES |
|
| Commission |
|
|
| Banks |
|
|
|
- |
114,874 |
|
| Trustee
- take up |
|
|
|
- |
162,066 |
|
| -
underwriting |
|
|
- |
150,000 |
|
| Consultancy
services |
|
|
- |
94,117 |
|
| Advertising |
|
|
|
- |
86,543 |
|
| Postage |
|
|
|
- |
29,574 |
|
| Stamp duty |
|
|
|
- |
75,000 |
|
|
|
---------- |
---------- |
|
|
|
|
- |
712,174 |
|
|
|
|
========== |
========== |
|
|
|
|
| 7.
OTHER EXPENSES |
|
|
|
|
|
|
| Printing
and stationery |
|
61,698 |
58,839 |
|
| Advertising
and publicity |
|
17,276 |
17,099 |
|
| Professional
charges |
|
12,817 |
17,517 |
|
| Listing
fee - stock exchanges |
|
46,250 |
37,500 |
|
|
- Central depository
company |
|
12,500 |
- |
|
| Computer
related expenses |
|
60,177 |
152,900 |
|
| Postage |
|
|
48,648 |
27,033 |
|
| Professional
tax |
|
38,000 |
15,000 |
|
| Share
transfer stamps |
|
14,489 |
20,730 |
|
| Bank
charges |
|
4,474 |
- |
|
| Excise duty |
|
|
7,400 |
15,800 |
|
| Miscellaneous |
|
1,359 |
1,535 |
|
|
|
---------- |
---------- |
|
|
|
325,088 |
363,953 |
|
|
|
|
========== |
========== |
|
|
| 8. TAXATION |
|
|
| 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 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 |
|
10,495,039 |
9,403,906 |
|
| Adjustment
for non cash charges and other items: |
|
| Provision
for diminution in the value of investment |
1,591,820 |
- |
|
| Profit
on sale of investment |
|
|
(9,524,170) |
(8,343,077) |
|
| Return
on current account with the ICP |
|
(590,923) |
(789,938) |
|
| Working
capital changes |
|
9.1 |
(586,381) |
(18,134) |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,385,385 |
252,757 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 9.1
Working capital changes |
|
|
| Increase
in current assets |
|
|
| Dividend
receivable |
|
|
(578,500) |
(60,000) |
|
| Prepaid
expenses |
|
|
(12,500) |
(5,000) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(591,000) |
(65,000) |
|
| Increase
in current liabilities |
|
|
|
|
| Accrued
expenses |
|
|
4,619 |
46,866 |
|
|
|
---------- |
---------- |
|
|
|
|
(586,381) |
(18,134) |
|
|
|
|
========== |
========== |
|
|
|
|
