| Ninth ICP Mutual Fund |
|
|
|
|
|
|
|
|
|
|
|
| 22nd
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 |
|
4 |
117,433,807 |
89,092,640 |
|
| [Market
value Rs. 178,978,910 (1997:Rs.288,574,550)] |
|
|
|
|
| Long
term deposit |
|
|
100,000 |
- |
|
|
|
|
|
| Current
assets |
|
|
|
| Dividend
receivable |
|
|
|
630,000 |
60,000 |
|
|
| Prepaid
expenses |
|
|
20,000 |
7,500 |
|
| Taxation
- net |
|
|
542 |
- |
|
|
|
---------- |
---------- |
|
|
|
650,542 |
67,500 |
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
|
55,538 |
47,887 |
|
| Unclaimed
dividend |
|
|
21,391,519 |
19,441,542 |
|
| Proposed
dividend |
|
|
15,000,000 |
- |
|
| Current
account with the Investment Corporation |
|
| of
Pakistan (1CP) |
|
|
3,554,019 |
16,565,727 |
|
| Taxation
- net |
|
|
- |
76,178 |
|
|
|
|
---------- |
---------- |
|
|
|
|
40,001,076 |
36,131,334 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(39,350,534) |
(36,063,834) |
|
|
|
|
---------- |
---------- |
|
|
|
|
78,183,273 |
53,028,806 |
|
|
|
|
|
========== |
========== |
|
| 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 |
|
|
28,183,273 |
3,028,806 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
78,183,273 |
53,028,806 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 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 |
|
|
9,780,016 |
6,142,853 |
|
| Return
on current account with the ICP |
|
- |
1,472,631 |
|
| Profit
on sale of investment |
|
|
62,524,172 |
3,929,550 |
|
| Other
income |
|
|
9,539 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
72,313,727 |
11,545,034 |
|
|
|
|
|
|
| EXPENDITURE |
|
|
|
| Management
fee |
|
5 |
3,856,026 |
4,679,422 |
|
| Auditors'
remuneration |
|
6 |
12,130 |
9,565 |
|
| Return
oil current account with the ICP |
|
2,631,734 |
|
|
| Expenses
incurred in respect of issue of Right certificates |
7 |
- |
723,816 |
|
| Other
expenses |
|
8 |
290,676 |
342,494 |
|
|
|
|
---------- |
---------- |
|
|
|
|
6,790,566 |
5,755,297 |
|
|
|
|
---------- |
---------- |
|
|
|
|
65,523,161 |
5,789,737 |
|
|
|
|
|
|
| WRITE
BACK OF PROVISION IN RESPECT OF GOLDEN |
|
| HANDSHAKE
EXPENSES |
|
3 |
126,306 |
- |
|
|
|
|
---------- |
---------- |
|
| INCOME
BEFORE TAXATION |
|
|
65,649,467 |
5,789,737 |
|
| TAXATION |
|
|
|
| Current |
|
9 |
495,000 |
- |
|
|
|
|
---------- |
---------- |
|
| NET
INCOME FOR THE YEAR |
|
|
65,154,467 |
5,789,737 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
|
3,028,806 |
19,739,069 |
|
|
|
|
---------- |
---------- |
|
| AVAILABLE
FOR APPROPRIATION |
|
|
68,183,273 |
25,528,806 |
|
|
|
|
---------- |
---------- |
|
| Interim
dividend @50%(1997:45%) |
|
25,000,000 |
22,500,000 |
|
| Final
dividend @ 30% (1997: Nil) |
|
15,000,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
40,000,000 |
22,500,000 |
|
|
|
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
|
---------- |
---------- |
|
| TO
REVENUE RESERVE |
|
28,183,273 |
3,028,806 |
|
|
|
|
========== |
========== |
|
|
| 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 |
|
10 |
5,182,180 |
362,930 |
|
| Sale
of investment |
|
|
76,571,065 |
26,535,170 |
|
| Purchase
of investment |
|
|
(42,388,060) |
(70,197,260) |
|
| Taxes paid |
|
|
(571,720) |
- |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from operating activities |
38,793,465 |
(43,299,160) |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Return
on current account with the ICP |
|
(2,631,734) |
1,472,631 |
|
| Long
term deposit |
|
|
(100,000) |
- |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from investing activities |
(2,731,734) |
1,472,631 |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Issue
of Right certificates |
|
|
- |
40,000,000 |
|
| Dividend
paid |
|
|
(23,050,023) |
(20,750.090) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from financing activities |
(23,050,023) |
19,249,910 |
|
|
|
|
---------- |
---------- |
|
| NET
INCREASE/(DECREASE) IN CASH EQUIVALENT |
|
13,011,708 |
(22,576,619) |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
|
(16,565,727) |
6,010,892 |
|
|
|
|
|
---------- |
---------- |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
11 |
(3,554,019) |
(16,565,727) |
|
|
|
|
========== |
========== |
|
|
|
| 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 tile stock exchanges in the country, the Ninth |
|
| ICP
Mutual Fund was established by the Investment Corporation of Pakistan (ICP),
acting as its trustee, on June 17, 1976 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. |
|
|
|
|
| 2.2
Investment |
|
|
| (i)
Investment is valued at average cost where cost is lower than the market
value, determined on tile 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 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.
BASIS OF ACCOUNTING FOR DISPOSAL OF SHARES OF PRIVATISED COMPANIES |
|
|
|
|
| In
previous years shares of Millat Tractors Limited were acquired by the
Privatisation Commission (the Commission) from tire Fund |
|
| through
Investment Corporation of Pakistan (ICP) for onward transmission to the
bidders under the Privatisation Scheme of the |
|
| Government
of Pakistan. |
|
|
| According
to the agreements reached with the bidders, the price payable was subject to
adjustment for the difference between figures as |
|
| per
audited accounts at specified dates and unaudited balance sheets used for the
bidding purposes and Commission's share of costs of |
|
| "golden
handshake" payable to employees of the privatised units. ICP was also
advised that proportionate share of Commission's expens- |
|
| es
would be deducted from the final disbursements. However. to date no amount
have been deducted on account of share of commissions' |
|
| expenses. |
|
|
| To
cover the above uncertainties, ICP has had to make certain provisions on
adhoc basis. In order to ensure liquidity o1' the Fund for sub- |
|
| sequent
payment of dividend, ICP acquired the Fund's holding at offered price less
price adjustments and proportionate cost of 'golden |
|
| handshake"
so far incurred and provision for further costs. |
|
|
|
|
| Subsequent
to the year end, ICP has been advised that there are no further amounts due
from ICP on account of golden hand shake and |
|
| privatisation
expenses. Accordingly, ICP has decided to reverse the balance of excess
provision held in their books. |
|
|
|
|
|
Amount of |
|
|
|
Amount |
expenses |
Amount of |
|
|
originally |
notified |
excess |
|
| Name
of Company |
|
provided for |
by the |
provision |
|
|
|
|
Commission |
reversed |
|
|
|
|
|
| Millat
Tractors Limited |
|
194,166 |
126,306 |
67,860 |
|
|
|
|
========== |
========== |
========== |
|
|
| 4.
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 |
|
|
|
INVESTMENT BANKS |
|
| 100000 |
100000 |
AI-Faysal Bank Ltd. |
|
30.25 |
3,025,000 |
9.27 |
927,000 |
30.25 |
3,025,000 |
17.80 |
1,780,000 |
|
| 100000 |
105000 |
Askari Commercial Bank
Ltd. |
31.42 |
3,300,000 |
13.75 |
1,443,750 |
33.00 |
3,300,000 |
28.50 |
2,850,000 |
|
| 115000 |
115000 |
Bank of Punjab Ltd. |
|
26.39 |
3,035,000 |
6.87 |
790,050 |
26.39 |
3,035,000 |
22.60 |
2,599,000 |
|
| 100000 |
100000 |
Muslim Commercial Bank
Ltd. |
37.25 |
3,725,000 |
18.75 |
1,875,000 |
37.25 |
3,725,000 |
32.90 |
3,290,000 |
|
|
|
|
|
TEXTILE SPINNING |
|
|
|
| 50000 |
50000 |
Nishat Ch. Textile Ltd. |
24.00 |
1,200,000 |
9.00 |
450,000 |
24.00 |
1,200,000 |
15.75 |
787,500 |
|
|
|
|
|
TEXTILE COMPOSITE |
|
|
| 50000 |
50000 |
Saphire Fabrics Ltd. |
|
37.25 |
1,862,500 |
29.00 |
1,450,000 |
37.25 |
1,862,500 |
34.00 |
1,700,000 |
|
|
|
|
|
SUGAR |
|
|
| 101077 |
57461 |
Habib Sugar Mills Ltd.
(Rs.5) |
4.72 |
271,585 |
7.50 |
430,957 |
5.32 |
537,585 |
11.50 |
1,162,386 |
|
|
|
|
|
CEMENT |
|
|
|
| 100000 |
100000 |
Gharibwal Cement
Industries |
19.40 |
1,940,000 |
5.00 |
500,000 |
19.40 |
1,940,000 |
23.20 |
2,320.00 |
|
|
Limited. |
|
|
| 100000 |
100000 |
Pak Land Cement Ltd. |
|
13.01 |
1,301,000 |
4.10 |
410,000 |
13.01 |
1,301,000 |
9.70 |
970,000 |
|
|
|
TOBACCO |
|
| 25000 |
25000 |
Pak. Tobacco Co. Ltd. |
|
38.00 |
950,000 |
21.00 |
525,000 |
38.00 |
950,000 |
27.50 |
687,500 |
|
|
|
|
|
FUEL AND ENERGY |
|
|
|
|
| 100000 |
100000 |
Hub Power Company Ltd. |
|
38.90 |
3,890,000 |
12.37 |
1,237,000 |
38.90 |
3,890,000 |
40.80 |
4,080,000 |
|
| 208321 |
158321 |
Karachi Electric Supply |
12.43 |
1,969,202 |
8.42 |
1,333.06 |
12.44 |
2,591,202 |
12.25 |
2,551,932 |
|
|
Corporation Ltd. |
|
|
|
|
|
| 110500 |
- |
National Refinery Limited |
- |
- |
- |
- |
21.29 |
2,352,233 |
28.50 |
3,149,250 |
|
| 652124 |
371124 |
Shell Pakistan Ltd. |
|
34.38 |
12,761,149 |
146.50 |
54,369,666 |
34.38 |
22,422,379 |
238.00 |
155,205,512 |
|
| - |
326062 |
Shell Pakistan Ltd. (RP) |
130.00 |
42,388,060 |
202.00 |
65,864.52 |
|
|
|
| 1778112 |
2044828 |
Sui Southern Gas Co. Ltd. |
4.73 |
9,675,813 |
9.00 |
18,403,452 |
5.44 |
9,675,813 |
28.25 |
50,231,664 |
|
|
|
TRANSPORT AND
COMMUNICATION |
|
| 100000 |
100000 |
P.T.C.L. "A" |
32.61 |
3,261,000 |
15.77 |
1,577,000 |
32.61 |
3,261,000 |
30.50 |
3,050,000 |
|
|
|
CHEMICAL AND
PHARMACEUTICAL |
|
| 10000 |
10000 |
BOC Pakistan Limited |
|
140.01 |
1,490,100 |
90.00 |
900,000 |
149.01 |
1,490,100 |
139.00 |
1,390,000 |
|
| 127887 |
129820 |
Engro Chemicals
(Pakistan) |
12.95 |
1,681,661 |
51.25 |
6,653,275 |
14.90 |
1,905,161 |
142.00 |
18,159,954 |
|
|
Limited. |
|
|
|
| 105000 |
105000 |
Fauji Fertilizer Ltd. |
|
68.90 |
7,244,150 |
51.37 |
5,393,850 |
68.99 |
7,244,150 |
78.75 |
8,268.75 |
|
| 92130 |
130 |
ICI Pakistan Ltd. |
|
9.23 |
1,200 |
11.62 |
1,511 |
10.02 |
923,040 |
24.20 |
2,229,546 |
|
|
|
|
|
|
PAPER AND BOARD |
|
| 356638 |
401217 |
Packages Ltd. |
|
31.05 |
12,461,387 |
36.00 |
14,443,812 |
34.94 |
12,461,387 |
62.00 |
22,111,556 |
|
|
|
|
---------- |
|
---------- |
|
---------- |
|
---------- |
|
|
|
117,433,807 |
|
178,978,910 |
|
89,092,640 |
|
288,574,550 |
|
|
|
|
========== |
|
========== |
|
========== |
|
========== |
|
|
| *
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. |
|
|
|
| 5.
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. 10 million |
|
50,000 |
50,000 |
|
| Management
fee @ 3 % per annum of the market |
|
| value
of net assets at the close of the year |
5.1 |
* 3,806,026 |
4,629,422 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,856,026 |
4,679,422 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
| 5.1
Market value of net assets at the close of the year |
|
|
|
|
|
| Investment
in quoted shares |
|
4 |
178,978,910 |
288,574,550 |
|
|
|
| Long
term deposit |
|
|
100,000 |
- |
|
| Current
assets |
|
|
|
| Dividend
receivable |
|
630,000 |
60,000 |
|
| Prepaid
expenses |
|
20,000 |
7,500 |
|
| Current
account with the ICP |
|
302,007 |
- |
|
| Taxation
- net |
|
|
542 |
- |
|
|
|
---------- |
---------- |
|
|
|
952,549 |
67,500 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
180,031,459 |
288,642,050 |
|
|
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
|
55,538 |
47,887 |
|
| Unclaimed
dividend |
|
|
21,391,519 |
19,441,542 |
|
|
|
| Current
account with the ICP |
|
- |
11,886,305 |
|
|
|
| Taxation
- net |
|
|
- |
76,178 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
21,447,057 |
31,451,912 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
158,584,402 |
257,190,138 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1998: |
(158,584,402 |
x |
40,000,000) |
@ 3% = |
* 3,806,026 |
|
|
|
|
|
|
|
50,000,000 |
|
========== |
|
|
|
|
|
|
|
|
|
|
|
| 1997: |
(257,190,138 |
x |
40,000,000 |
x 9 ) |
@ 3% = |
* 4,629,422 |
|
|
|
|
50,000,000 |
12 |
|
========== |
|
|
|
|
|
|
| 6.
AUDITORS' REMUNERATION |
|
|
|
|
Taseer Hadi |
Ford Rhodes |
1997 |
1998 |
|
|
|
Khalid |
Robson |
Rupees |
Rupees |
|
|
|
& Co. |
Morrow |
|
|
| Audit fee |
|
2,565 |
2,565 |
4,390 |
5,130 |
|
| Tax
services |
|
7,000 |
- |
5,175 |
7,000 |
|
|
|
---------- |
---------- |
---------- |
---------- |
|
|
|
9,565 |
2,565 |
12,130 |
9,565 |
|
|
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
|
| 7.
EXPENSES INCURRED IN RESPECT OF ISSUE OF RIGHT CERTIFICATES |
|
| Commission |
|
|
| Banks |
|
|
- |
201,536 |
|
|
|
| Trustee
- take up |
|
|
- |
52,095 |
|
|
|
| -
underwriting |
|
|
- |
200,000 |
|
|
|
| Consultancy
services |
|
|
|
- |
113,726 |
|
|
|
| Advertising |
|
|
|
- |
22,824 |
|
|
|
| Postage |
|
|
|
|
- |
33,635 |
|
|
|
| Stamp duty |
|
|
|
|
- |
100,000 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
- |
723,816 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| 8.
OTHER EXPENSES |
|
|
|
|
|
|
| Printing
and stationery |
|
|
44,632 |
33,369 |
|
|
|
| Advertising
and publicity |
|
|
17,276 |
88,246 |
|
|
|
| Professional
charges |
|
|
12,817 |
17,517 |
|
|
|
| Listing
fee - stock exchanges |
|
|
46,250 |
35,000 |
|
|
|
|
-central depository
company |
|
12,500 |
- |
|
|
|
| Computer
related expenses |
|
|
52,999 |
120,100 |
|
|
|
| Postage |
|
|
|
41,110 |
23,071 |
|
|
|
| Professional
tax |
|
|
38,000 |
15,000 |
|
|
|
| Share
transfer stamps |
|
|
4,645 |
1,500 |
|
|
|
| Bank
charges |
|
|
15,488 |
- |
|
|
|
| Excise
duty |
|
|
3,600 |
7,200 |
|
|
|
| Miscellaneous |
|
|
1,359 |
1,491 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
290,676 |
342,494 |
|
|
|
|
========== |
========== |
|
|
|
|
