| Second ICP Mutual Fund |
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| 32nd
Annual Report-2000 |
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| INVESTMENT
CORPORATION OF PAKISTAN |
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|
If undelivered please
return to: |
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| HEAD OFFICE: |
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MUTUAL FUNDS DEPARTMENT: |
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| NBP
Building, 5th Floor |
Dawood Centre, Ground
Floor |
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| I.I.
Chundrigar Road, Karachi. |
Moulvi Tamizuddin Khan
Road, Karachi. |
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| Phones:
9212360-69 |
Phones: 5686014-15,
5685104-05 |
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| Telefax;
92-21-9212388-89 |
Telefax: 92-21-9202783 |
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| E-mail:
icp@paknet2-3.pct.pk |
E-mail:
icp@paknet2-3.pct.pk |
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|
|
| Directors'
Report to the Certificate Holders |
|
| for
the Year Ended June 30, 2000 |
|
|
| The
Mutual Fund's 32nd Annual Report for the year ended June 30, 2000 is hereby
being presented for your review. |
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| Financial
Results |
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| The
financial results of the Mutual Fund for the year under review are summarized
as under: |
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|
(Rs. '000') |
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|
| Net
(Loss) before Taxation |
|
(5,803) |
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| Taxation |
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|
(360) |
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|
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|
------------------ |
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| Net
(Loss) after Taxation |
|
(6,163) |
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| Un-appropriated
income B/F |
|
6,487 |
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|
------------------ |
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| Un-appropriated
Income carried forward to |
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| Revenue
Reserve |
|
324 |
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| Basic
(Loss) per certificate (in rupees) |
|
(1.23) |
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| Mutual
Fund Operation |
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| The
policy measures taken by the present Government for the implementation of its
economic and structural reforms has helped in |
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| improving
the stock market situation. The stock market index after remaining stable
between 1100-1200 points from July to |
|
| October
1999 started rising from November and continued upward trend till March 2000
when it went as high as 2054 points. |
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| However,
the upward trend could not be sustained beyond March 2000 and the index
dipped at 1521 points as on June 30, 2000. |
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| During
the year the Second Mutual Fund earned total income of Rs.5.61 million
including Rs.4.05 million dividend income. |
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| The
main reason for the loss was Rs.9.80 million on diminution in the value of
certain investments. NAV's worked out at Rs. 12.37 |
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| per
certificate as compared to Rs..9.47 last year. |
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|
| Future
Prospects |
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| The
stock market situation is likely to improve due to Government's steady
measures to strengthen capital market. Such measures |
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| include
agreement with IMF, acceleration of the privatisation process, expected
resolution of Hubco dispute and average corporate |
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| earnings
growth of 14% expected for FY2001 etc. Your management will closely monitor
the situation to maximize return on its |
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| investment
portfolio. |
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|
| Pattern
of Certificate Holdings |
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| The
pattern of certificate holding is annexed herewith. |
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|
| Auditors |
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| Our
present auditors M/s. Taseer, Hadi, Khalid & Company and M/s. Ford,
Rhodes, Robson, Morrow retire and being eligible |
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| offer
themselves for re-appointment. |
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|
| Acknowledgment |
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| In
the end we wish to express our thanks to all our certificate holders, bankers
and other financial institutions for their continued |
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| support. |
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|
for the Investment Corporation of Pakistan |
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|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
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|
Managing Director |
|
Director |
|
Director |
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|
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| Karachi:
7-12-2000 |
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| BALANCE
SHEET AS AT 30 JUNE 2000 |
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|
Note |
2000 |
1999 |
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| NET ASSETS |
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| Investment
in quoted shares |
|
3 |
46,308,941 |
49,917,006 |
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| [Market
value Rs.57,791,917 (1999: Rs.40,738,040)] |
|
|
| Security deposit |
|
100,000 |
100,000 |
|
|
|
| Current assets |
|
| Dividend
receivable |
|
|
952,500 |
741,047 |
|
| Prepaid
expenses |
|
|
-- |
7,500 |
|
| Current
account with the Investment Corporation of Pakistan (ICP) |
4,426,561 |
12,152,487 |
|
| Taxation - act |
|
|
420,385 |
635,235 |
|
| Cash at bank |
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|
224,980 |
-- |
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|
------------------ |
------------------ |
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|
6,024,426 |
13,536,269 |
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| Current
liabilities |
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| Accrued
expenses |
|
13,400 |
19,338 |
|
| Unclaimed
dividend |
|
1,946,305 |
1,897,272 |
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| Dividend
Payable |
|
-- |
5,000,000 |
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|
------------------ |
------------------ |
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|
1,959,705 |
6,916,610 |
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|
------------------ |
------------------ |
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|
4,064,721 |
6,619,659 |
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|
------------------ |
------------------ |
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|
Rupees |
50,473,662 |
56,636,665 |
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|
========== |
========== |
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| FINANCED BY |
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| Capital
and Reserves |
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| Capital |
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| Authorized |
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| 5,000,000
Certificates of Rs. 10/- each |
Rupees |
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 |
|
| General reserve |
|
150,000 |
150,000 |
|
| Unappropriated income |
|
323,662 |
6,486,665 |
|
|
------------------ |
------------------ |
|
|
|
Rupees |
50,473,662 |
56,636,665 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
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|
|
|
|
|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
|
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
| Karachi:
7-12-2000 |
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|
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| INCOME
AND EXPENDITURE ACCOUNT |
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| FOR
THE YEAR-ENDED 30 JUNE 2000 |
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|
Note |
2000 |
1999 |
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|
|
|
Rupees |
Rupees |
|
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| INCOME |
|
| Dividend |
|
|
4,048,266 |
3,758,806 |
|
| Return
on current account with ICP |
|
1,117,060 |
692,773 |
|
| Profit
on sale of investments |
|
|
444,510 |
2,405,598 |
|
| Other income |
|
|
-- |
6,134 |
|
|
|
------------------ |
------------------ |
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|
|
|
5,609,836 |
6,863,311 |
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| EXPENDITURE |
|
|
|
|
| Management
fee |
|
4 |
1,376,089 |
1,176,612 |
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| Auditors'
remuneration |
|
5 |
21,335 |
14,730 |
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| Diminution
in the value of investments |
|
9,797,780 |
1,040,061 |
|
| Other expenses |
|
6 |
217,465 |
224,014 |
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|
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|
------------------ |
------------------ |
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|
|
|
11,412,669 |
2,455,417 |
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|
------------------ |
------------------ |
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|
(5,802,833) |
4,407,894 |
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| (LOSS)/INCOME
BEFORE TAXATION |
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| TAXATION
- Current |
|
7 |
360,170 |
-- |
|
| - Prior |
|
|
-- |
40,189 |
|
|
|
|
------------------ |
------------------ |
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|
|
|
360,170 |
40,189 |
|
|
|
|
| NET
(LOSS) / INCOME AFTER TAXATION |
|
(6,163,003) |
4,367,705 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
6,486,665 |
7,118,960 |
|
|
|
|
------------------ |
------------------ |
|
| AVAILABLE
FOR APPROPRIATION |
|
323,662 |
11,486,665 |
|
|
|
|
| Final
dividend - (1999: @ 10%) |
|
|
-- |
5,000,000 |
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
Rupees |
323,662 |
6,486,665 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Basic
(loss) / earnings per share (certificate) |
8 |
(1.23) |
0.87 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
|
|
|
|
|
|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
|
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
9 |
2,223,486 |
2,491,564 |
|
| Sale
of investments |
|
601,175 |
8,176,443 |
|
| Purchase
of investments |
|
|
(6,346,380) |
(1,274,000) |
|
| Taxes paid |
|
(145,320) |
(39,767) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from operating activities |
|
(3,667,039) |
9,354,240 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Return
on current account with ICP |
|
1,117,060 |
692,773 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
1,117,060 |
692,773 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Dividend paid |
|
(4,950,967) |
(3,983,279) |
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
(4,950,967) |
(3,983,279) |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
| NET
(DECREASE) / INCREASE IN CASH & CASH EQUIVALENTS |
(7,500,946) |
6,063,734 |
|
| CASH
& CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
12,152,487 |
6,088,753 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
& CASH EQUIVALENTS AT THE END OF THE YEAR |
10 Rupees |
4,651,541 |
12,152,487 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
|
|
|
|
|
|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
|
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
|
|
Issued, |
General |
Unappropriated |
Total |
|
|
Subscribed and |
Reserve |
Income |
|
|
|
paid up capital |
Rupees |
|
|
|
|
|
|
Rupees |
|
Rupees |
|
|
|
|
|
| Balance
as at 30 June 1998 |
|
50,000,000 |
150,000 |
7,118,960 |
57,268,960 |
|
| Net
Income for the year |
|
-- |
-- |
4,367,705 |
4,367,705 |
|
| Dividend |
|
-- |
-- |
(5,000,000) |
(5,000,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1999 |
|
50,000,000 |
150,000 |
6,486,665 |
56,636,665 |
|
| Net
loss for the year |
|
-- |
-- |
(6,163,003) |
(6,163,003) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
Rupees |
50,000,000 |
150,000 |
323,662 |
50,473,662 |
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
|
|
|
|
|
|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
|
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
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|
| 1.
THE FUND AND ITS OPERATIONS |
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|
|
| In
order to broaden the base and to encourage investment in shares, of companies
quoted on the stock exchanges in the country, |
|
| Second
ICP Mutual Fund was established by the Investment Corporation of Pakistan
(ICP), acting as its trustee, on May 16, 1968 |
|
| under
the ICP Ordinance, 1966. The Fund is listed on the stock exchanges in
Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Basis of preparation |
|
| These
accounts have been prepared in accordance with International Accounting
Standards, as applicable in Pakistan. |
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|
|
|
| 2.2
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.3 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 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; and |
|
|
| iii)
Profit or loss on sale of investment is accounted for in the year in which it
arises. |
|
|
| 2.4 Taxation |
|
|
|
| Provision
for taxation is based on taxable income at the current rates for taxation
after taking into account tax credits available, if any. |
|
|
| 2.5
Revenue recognition |
|
|
|
| i)
Dividend income is accounted for at the closure of share transfer books of
the company declaring dividend; and |
|
| 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. |
|
|
| 2000 |
1999 |
|
2000 |
|
1999 |
|
| *Holding |
Name of 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 |
|
|
| 54,000 |
54,000 |
F.G. Modaraba |
|
9.65 |
521,200 |
14.58 |
787,320 |
9.65 |
521,200 |
12.25 |
661,500 |
|
|
|
|
LEASING |
|
|
| 8,750 |
8,750 |
Orix Leasing Company Ltd. |
39.35 |
344,350 |
30.00 |
262,500 |
39.35 |
344,350 |
26.00 |
227,500 |
|
|
|
|
TEXTILE SPINNING |
|
| 15,125 |
15,125 |
Gulshan Spinning Mills
Ltd. |
19.00 |
287,375 |
16.50 |
249,563 |
19.00 |
287,375 |
14.00 |
211,750 |
|
|
|
|
SUGAR AND ALLIED |
|
| 140,047 |
141,047 |
Mehran Sugar Mills Ltd. |
11.00 |
1,540,517 |
13.25 |
1,855,623 |
11.00 |
1,551,517 |
11.00 |
1,551,517 |
| 22,000 |
22,000 |
Sanghar Sugar Mills Ltd. |
7.00 |
154,000 |
4.00 |
88,000 |
7.00 |
154,000 |
7.00 |
154,000 |
|
|
|
|
CEMENT |
|
|
| 71,286 |
71,286 |
Cherat Cement Company
Ltd. |
6.38 |
455,116 |
21.48 |
1,531,223 |
6.38 |
455,115 |
13.00 |
926,718 |
| 105,000 |
105,000 |
Dadabhoy Cement
Industries Ltd. |
8.00 |
840,000 |
6.53 |
685,650 |
8.00 |
840,000 |
4.25 |
446,250 |
| 18,200 |
18,200 |
Gharibwal Cement
Industries Ltd. |
2.97 |
54,199 |
8.10 |
147,420 |
2.98 |
54,199 |
4.25 |
77,350 |
|
|
|
|
FUEL AND ENERGY |
|
| 150,000 |
150,000 |
Hub Power Company Ltd. |
30.13 |
4,519,500 |
14.70 |
2,205,000 |
30.13 |
4,519,500 |
14.07 |
2,110,500 |
| 183,551 |
183,551 |
Karachi Electric Supply
Corporation Ltd. |
4.25 |
780,162 |
9.53 |
1,749,241 |
4.25 |
780,162 |
8.67 |
1,591,387 |
| 60,000 |
72,000 |
National Refinery Ltd. |
10.32 |
619,446 |
42.45 |
2,547,000 |
10.32 |
743,286 |
30.37 |
2,186,640 |
| 65,237 |
22,698 |
Pakistan State Oil
Company Ltd. |
160.36 |
10,461,550 |
163.10 |
10,640,155 |
181.30 |
4,115,171 |
92.75 |
2,105,240 |
| 32,700 |
32,700 |
Shell Pakistan Ltd. |
137.73 |
4,503,998 |
267.63 |
8,751,501 |
137.74 |
4,503,998 |
163.00 |
5,330,100 |
| 141,668 |
123,190 |
Sui North Gas Pipelines
Company Ltd. |
3.97 |
562,500 |
16.10 |
2,280,855 |
4.57 |
562,500 |
8.37 |
1,031,100 |
|
|
|
|
AUTO AND ALLIED
ENGINEERING |
|
| 99,500 |
100,000 |
Pak Suzuki Motors Company
Ltd. |
12.50 |
1,243,750 |
12.50 |
1,243,750 |
43.65 |
4,364,500 |
25.00 |
2,500,000 |
|
|
|
|
TRANSPORT AND
COMMUNICATION |
|
|
| 100,000 |
100,000 |
P.T.C.L. "A" |
|
33.25 |
3,325,000 |
27.08 |
2,708,000 |
33.25 |
3,325,000 |
20.02 |
2,002,000 |
|
|
|
|
|
|
|
CHEMICAL AND
PHARMACEUTICALS |
|
|
| 10,235 |
10,235 |
BOC Pakistan Ltd. |
129.57 |
1,326,189 |
114.00 |
1,166,790 |
129.57 |
1,326,189 |
81.00 |
829,035 |
| 47,974 |
47,974 |
Engro Chemicals
(Pakistan) Ltd. |
82.59 |
3,962,430 |
59.33 |
2,846,297 |
82.60 |
3,962,430 |
73.67 |
3,534,245 |
| 150,000 |
150,000 |
Fauji Fertilizer Company
Ltd. |
75.59 |
5,937,000 |
39.58 |
5,937,000 |
75.60 |
11,339,705 |
41.17 |
6,175,500 |
| 116,500 |
116,500 |
F.F.C. Jardan Fertilizer
Company Ltd. |
20.17 |
1,054,325 |
9.05 |
1,054,325 |
20.18 |
2,350,475 |
11.25 |
1,310,625 |
| 212,227 |
212,227 |
ICI Pakistan Ltd. |
|
10.00 |
2,123,314 |
15.13 |
3,210,994 |
10.00 |
2,123,314 |
9.00 |
1,910,043 |
|
|
|
|
|
|
|
PAPER AND BOARD |
|
|
|
| 20,100 |
20,100 |
Cherat Papersack Ltd. |
44.05 |
885,555 |
64.00 |
1,286,000 |
44.06 |
885,555 |
38.00 |
763,800 |
| 75,640 |
75,640 |
Packages Ltd. |
|
10.67 |
807,465 |
60.25 |
4,557,310 |
10.68 |
807,465 |
41.00 |
3,101,240 |
|
|
|
|
------------------ |
|
------------------ |
|
------------------ |
|
------------------ |
|
|
|
Rupees |
46,308,941 |
|
57,791,917 |
|
49,917,006 |
|
40,738,040 |
|
|
|
|
========== |
|
========== |
|
========== |
|
========== |
|
| *
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 |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| Management
Fee @ 1/2% per annum of the initial |
|
|
|
| Paid-up-capital
of Rs. 15 million. |
|
75,000 |
75,000 |
|
|
| Management
fee on capital raised through right issue |
|
| @ 3% of net assets
market value of the Fund |
|
| 61,956,638
x 35,000,000 x 3% |
|
1,301,089 |
1,101,612 |
|
| 50,000,000 |
|
|
------------------ |
------------------ |
|
|
Rupees |
1,376,089 |
1,176,612 |
|
|
========== |
========== |
|
|
|
|
| 4.1
Market value of not assets at the close of the year |
|
| Investment
in quoted shares |
|
3 |
57,791,917 |
40,738,040 |
|
| Long
term deposits |
|
|
100,000 |
100,000 |
|
|
|
|
|
|
| Current assets |
|
|
|
| Dividend
receivable |
|
|
952,500 |
741,047 |
|
| Prepaid
expenses |
|
|
-- |
7,500 |
|
| Current
account with ICP |
|
|
4,426,561 |
12,152,487 |
|
| Taxation-net |
|
|
|
420,385 |
635,235 |
|
| Cash at bank |
|
|
|
224,980 |
-- |
|
|
------------------ |
------------------ |
|
|
6,024,426 |
13,536,269 |
|
|
------------------ |
------------------ |
|
|
63,916,343 |
54,374,309 |
|
|
| Current
Liabilities |
|
| Accrued
expenses |
|
13,400 |
19,338 |
|
| Unclaimed
dividend |
|
1,946,305 |
1,897,272 |
|
|
|
------------------ |
------------------ |
|
|
|
1,959,705 |
1,916,610 |
|
|
|
------------------ |
------------------ |
|
|
Rupees |
61,956,638 |
52,457,699 |
|
|
========== |
========== |
|
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
Taseer Hadi |
Ford, Rhodes, |
2000 |
1999 |
|
|
|
Khalid & Co. |
Robson, Morrow |
Rupees |
Rupees |
|
|
|
Rupees |
Rupees |
|
|
|
| Audit fee |
|
2,950 |
2,950 |
5,900 |
5,900 |
|
| Tax services |
|
15,435 |
-- |
15,435 |
8,830 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
18,385 |
2,950 |
21,335 |
14,730 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 6.
OTHER EXPENSES |
|
| Printing
end stationery |
|
8,246 |
7,623 |
|
| Advertising
and publicity |
|
2,373 |
3,185 |
|
