| Third ICP Mutual Fund |
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| 31st
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. |
|
| Phones:
9212360-69 |
Phones: 5686014-15,
5685104-05 |
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| Telefax;
92-21-9212388-89 |
Telefax: 92-21-9202783 |
|
| 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 31st Annual Report for the year ended June 30, 2000 is hereby
being presented for your review. |
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|
| Financial
Results |
|
| The
financial results of the Mutual Fund for the year under review are summarized
as under: |
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|
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|
(Rs. '000') |
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|
| Net
Income before Taxation |
|
1,538 |
|
| Taxation |
|
|
-- |
|
|
|
|
------------------ |
|
| Net
Income after Taxation |
|
1,538 |
|
| Un-appropriated
income B/F |
|
5,476 |
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|
|
|
------------------ |
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| Available
for Appropriation |
|
7,014 |
|
| Cash
Dividend (10%) |
|
5,000 |
|
| Un-appropriated
Income carried forward to |
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| Revenue
Reserve |
|
0.31 |
|
|
| Basic
Earning per certificate (in rupees) |
|
|
| Mutual
Fund Operation |
|
| The
policy measures taken by the present Government for the implementation of its
economic and structural reforms has helped in |
|
| 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. |
|
| However,
the upward trend could not be sustained beyond March 2000 and the index
dipped at 1521 points as on June 30, 2000. |
|
|
| During
the year under review the Third Mutual Fund earned total income of Rs.8.11
million including dividend income of Rs.5.87 |
|
| million.
Net income for the year after incurring expenditure of Rs.2.05 million and
Rs.4.52 million on account of diminution in |
|
| the
value of investments amounted to Rs.1.54 million. NAV's worked out at Rs.
18.26 per certificate as compared to Rs. 11.74 |
|
| last year. |
|
|
| 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 |
|
| earnings
growth of 14% expected for FY2001 etc. Your management will closely monitor
the situation to maximize return on |
|
| investment
portfolio. |
|
|
| Pattern
of Certificate Holdings |
|
| The
pattern of certificate holding is annexed herewith. |
|
|
| Auditors |
|
| Our
present auditors M/s. Taseer, Hadi, Khalid & Company and M/s. Ford,
Rhodes, Robson, Morrow retire and being eligible |
|
| offer
themselves for re-appointment. |
|
|
| Acknowledgement |
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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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|
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|
for the Investment Corporation of Pakistan |
|
|
|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
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|
Managing Director |
|
Director |
|
Director |
|
|
|
|
| Karachi:
7-12-2000 |
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|
|
| BALANCE
SHEET AS AT 30 JUNE 2000 |
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|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
| NET ASSETS |
|
|
|
|
|
|
| Investments
in quoted shares |
|
3 |
52,868,484 |
59,001,756 |
|
| [Market
value Rs.87,604,188 (1999 Rs. 62,343,146)] |
|
|
|
|
|
|
| Long
term deposit |
|
|
100,000 |
100,000 |
|
|
|
|
| Current assets |
|
|
| Dividend
receivable |
|
|
600,000 |
525,000 |
|
| Prepaid
expenses |
|
-- |
7,500 |
|
| Current
account with the Investment Corporation |
|
|
|
| of Pakistan (ICP) |
|
|
5,712,782 |
5,946,104 |
|
| Advance tax-net |
|
517,638 |
265,902 |
|
| Cash at bank |
|
|
224,980 |
-- |
|
|
------------------ |
------------------ |
|
|
|
7,055,400 |
6,744,506 |
|
| Current
liabilities |
|
|
| Accrued
expenses |
|
13,400 |
19,338 |
|
| Dividend
payable |
|
|
5,000,000 |
7,500,000 |
|
| Unclaimed
dividend |
|
|
2,996,322 |
2,850,704 |
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|
|
|
------------------ |
------------------ |
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|
|
|
8,009,722 |
10,370,042 |
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|
|
|
------------------ |
------------------ |
|
|
|
|
(954,322) |
(3,625,536) |
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|
|
|
------------------ |
------------------ |
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|
|
|
52,014,162 |
55,476,220 |
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|
|
|
========== |
========== |
|
|
| FINANCED BY |
|
| Capital
and Reserves |
|
| Capital |
|
| Authorised |
|
| 5,000,000
(1999: 5,000,000) |
|
|
50,000,000 |
50,000,000 |
|
| Certificates
of Rs.10/- each |
|
|
| Issued,
subscribed and paid-up |
|
| 5,000,000
(1999: 5,000,000) |
|
| Certificates
of Rs. 10/- each fully paid in each |
|
50,000,000 |
50,000,000 |
|
| Revenue
reserve |
|
|
| Unappropriated
income |
|
|
2,014,162 |
5,476,220 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
52,014,162 |
55,476,220 |
|
|
|
|
========== |
========== |
|
|
|
|
| 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 |
|
|
|
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|
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| INCOME
AND EXPENDITURE ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
| Dividend |
|
5,874,784 |
4,061,424 |
|
| Return
on current account with the ICP |
|
528,160 |
259,844 |
|
| Profit
on sale of investments |
|
1,706,877 |
3,791,634 |
|
| Miscellaneous |
|
|
-- |
9,765 |
|
|
|
------------------ |
------------------ |
|
|
|
8,109,821 |
8,122,667 |
|
|
|
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| EXPENDITURE |
|
| Management fee |
|
4 |
1,751,498 |
1,293,717 |
|
| Auditors'
remuneration |
|
5 |
35,461 |
15,274 |
|
| Diminution
in the value of investments |
|
4,521,902 |
571,600 |
|
| Other expenses |
|
6 |
263,018 |
198,056 |
|
|
|
|
------------------ |
------------------ |
|
|
6,571,879 |
2,078,647 |
|
|
------------------ |
------------------ |
|
| NET
INCOME BEFORE TAXATION |
|
1,537,942 |
6,044,020 |
|
|
|
|
|
| TAXATION |
|
|
|
| - Prior |
|
7 |
-- |
16,473 |
|
|
|
------------------ |
------------------ |
|
| NET
INCOME FOR THE YEAR |
|
|
1,537,942 |
6,027,547 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
5,476,220 |
6,948,673 |
|
|
|
------------------ |
------------------ |
|
| AVAILABLE
FOR APPROPRIATION |
|
7,014,162 |
12,976,220 |
|
|
| Final
dividend @ 10% (1999: @ 15%) |
|
5,000,000 |
7,500,000 |
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
2,014,162 |
5,476,220 |
|
| TO
REVENUE RESERVE |
|
========== |
========== |
|
|
| Basic
earnings per certificate |
|
8 |
0.31 |
1.21 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
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 |
3,751,369 |
2,649,648 |
|
| Sale
of investments |
|
|
3,318,247 |
8,791,267 |
|
| Taxes paid |
|
|
(251,736) |
(753,082) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
6,817,880 |
10,687,833 |
|
|
|
|
========== |
========== |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Return
on current account with the ICP |
|
528,160 |
259,844 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
528,160 |
259,844 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Dividend paid |
|
(7,354,382) |
(4,012,117) |
|
|
------------------ |
------------------ |
|
| Net
cash outflow from financing activities |
|
(7,354,382) |
(4,012,117) |
|
|
|
|
------------------ |
------------------ |
|
| NET
(DECREASE) / INCREASE IN CASH & CASH EQUIVALENTS |
(8,342) |
6,935,560 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
EQUIVALENTS AT THE BEGINNING OF THE YEAR |
5,946,104 |
(989,456) |
|
|
|
|
------------------ |
------------------ |
|
| CASH
& CASH EQUIVALENTS AT THE END OF THE YEAR |
10 |
5,937,762 |
5,946,104 |
|
|
|
|
|
========== |
========== |
|
|
|
|
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 |
|
|
|
Capital |
Revenue Reserve |
Total |
|
|
Issued, |
Unappropriated |
|
|
|
Subscribed and |
Income |
|
|
|
paid up capital |
|
|
|
|
Rupees |
Rupees |
Rupees |
|
|
| Balance
as at 30 June 1998 |
|
50,000,000 |
6,948,673 |
56,948,673 |
|
| Net
Income for the year |
|
-- |
6,027,547 |
6,027,547 |
|
| Dividend |
|
-- |
(7,500,000) |
(7,500,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1999 |
|
50,000,000 |
5,476,220 |
55,476,220 |
|
| Net
Income for the year |
|
-- |
1,537,942 |
1,537,942 |
|
| Divided |
|
-- |
(5,000,000) |
(5,000,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
|
50,000,000 |
2,014,162 |
52,014,162 |
|
|
========== |
========== |
========== |
|
|
| 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 |
|
|
| 1.
THE FUND AND ITS OPERATIONS |
|
| In
order to broaden the base and to encourage investment in shares of the
companies quoted on the stock exchanges in the country, |
|
| Third
ICP Mutual Fund was established by the Investment Corporation of Pakistan
(ICP), acting as its trustee, on May 08, 1969 under the |
|
| ICP
Ordinance 1966. The Fund is listed all 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
taking any effect of inflation. |
|
|
|
| 2.2 Investments |
|
|
|
| i)
Investments are 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
revised book value; and |
|
|
| 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 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 the ICP is accounted for on the basis of the
PLS rate declared half yearly by the 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 |
|
9.61 |
519,000 |
14.58 |
787,320 |
9.61 |
519,000 |
12.25 |
661,500 |
|
|
|
|
LEASING |
|
|
| 31,250 |
31,250 |
Orix Leasing Company Ltd. |
39.44 |
1,232,500 |
30.00 |
937,500 |
39.44 |
1,232,500 |
26.00 |
812,500 |
|
|
|
|
INVESTMENT BANKS |
|
| 60,588 |
83,490 |
Bank Al Habib Ltd. |
14.06 |
852,015 |
14.93 |
904,579 |
16.87 |
1,409,000 |
18.00 |
1,502,820 |
|
|
|
|
TEXTILE COMPOSITE |
|
| 32,000 |
32,000 |
Burewala Textile Mills
Ltd. |
22.00 |
704,000 |
32.00 |
1,024,000 |
22.00 |
704,000 |
22.00 |
704,000 |
|
|
|
|
|
|
|
|
|
|
|
SYNTHETIC & RAYON |
|
| 4,716 |
30,153 |
Dewan Salman Fibre Ltd. |
7.23 |
34,075 |
28.08 |
132,425 |
12.17 |
367,080 |
25.17 |
758,951 |
|
|
|
|
|
|
|
|
|
|
|
SUGAR |
|
|
| 186,071 |
186,071 |
Shahtaj Sugar Mills Ltd. |
11.96 |
2,224,779 |
15.00 |
2,791,065 |
11.95 |
2,224,779 |
20.27 |
3,771,659 |
|
|
|
|
CEMENT |
|
|
| 20,000 |
30,000 |
Lucky Cement Company Ltd. |
3.82 |
76,400 |
9.05 |
181,000 |
3.82 |
114,600 |
3.82 |
114,600 |
|
|
|
|
FUEL AND ENERGY |
|
| 179,159 |
179,151 |
Karachi Electric Supply
Corporation Ltd. |
9.17 |
1,642,223 |
9.53 |
1,707,385 |
9.16 |
1,642,223 |
8.67 |
1,553,309 |
| 45,000 |
48,000 |
National Refinery Ltd. |
11.69 |
525,850 |
42.45 |
1,910,250 |
11.68 |
560,920 |
30.37 |
1,457,760 |
| 143,738 |
119,782 |
Pakistan State Oil
Company Ltd. |
110.96 |
15,949,838 |
163.10 |
23,443,668 |
133.15 |
15,949,838 |
92.75 |
11,109,781 |
| 71,846 |
71,846 |
Shell Pakistan Ltd. |
86.00 |
6,178,397 |
167.63 |
19,228,145 |
85.99 |
6,178,397 |
163.00 |
11,710,899 |
|
|
|
|
AUTO AND ALLIED
ENGINEERING |
|
| 500,000 |
500,000 |
Pak Suzuki Motors Company
Ltd. |
12.50 |
625,000 |
12.50 |
625,000 |
43.28 |
2,164,000 |
25.00 |
1,250,000 |
|
|
|
|
CABLES & ELECTRICAL |
|
|
|
| 16,940 |
16,940 |
Philips Electrical
Industries of Pakistan Ltd. |
71.33 |
1,208,270 |
59.55 |
1,008,777 |
71.32 |
1,208,270 |
41.95 |
710,633 |
| 8,316 |
8,316 |
Refrigerators
Manufacturing Company Pakistan Ltd. |
8.95 |
74,428 |
8.95 |
74,428 |
62.26 |
517,830 |
10.00 |
83,160 |
|
|
|
|
|
|
|
TRANSPORT AND
COMMUNICATION |
|
|
| 100,000 |
100,000 |
P.T.C.L. "A" |
|
33.16 |
3,315,500 |
27.08 |
2,708,000 |
33.15 |
3,315,500 |
20.02 |
2,002,000 |
|
|
|
|
|
|
|
CHEMICAL AND
PHARMACEUTICALS |
|
|
| 11,500 |
11,300 |
BOC Pakistan Ltd. |
129.57 |
1,490,100 |
114.00 |
1,311,000 |
129.57 |
1,490,100 |
81.00 |
931,500 |
| 33,124 |
33,124 |
Engro Chemicals
(Pakistan) Ltd. |
82.44 |
2,730,900 |
59.33 |
1,965,247 |
82.44 |
2,730,000 |
73.67 |
2,440,244 |
| 25,000 |
50,000 |
F.F.C. Jardan Fertilizer
Company Ltd. |
9.05 |
226,250 |
9.05 |
226,250 |
13.43 |
671,500 |
41.17 |
4,117,000 |
| 100,000 |
100,000 |
Fauji Fertilizer Company
Ltd. |
39.58 |
3,958,000 |
39.58 |
3,958,000 |
63.88 |
6,388,000 |
11.25 |
562,500 |
| 166,620 |
186,620 |
ICI Pakistan Ltd. |
|
14.15 |
2,357,330 |
15.13 |
2,520,961 |
14.14 |
2,640,330 |
9.00 |
1,679,580 |
|
|
|
|
|
|
|
PAPER AND BOARD |
|
|
|
| 256,750 |
258,750 |
Packages Ltd. |
|
14.68 |
3,768,579 |
60.25 |
15,469,188 |
14.67 |
3,797,939 |
41.00 |
10,608,750 |
|
|
|
|
|
|
|
FOOD & ALLIED |
|
|
|
| 5,000 |
5,000 |
Lever Brothers (Pak) Ltd.
(Rs. 50) |
635.01 |
3,175,050 |
938.00 |
4,690,000 |
635.01 |
3,175,050 |
760.00 |
3,800,000 |
|
|
|
|
------------------ |
|
------------------ |
|
------------------ |
|
------------------ |
|
|
|
|
52,868,484 |
|
87,604,188 |
|
59,001,756 |
|
62,343,146 |
|
|
|
|
========== |
|
========== |
|
========== |
|
========== |
|
| 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 (RI) is payable @ 3% per annum of the net assets |
|
| market
value of the Fund to be determined at the close of the financial year as
follows: |
|
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
| Management
fee on initial paid-up capital @ 1/2% |
|
| on
Rs. 20.00 million. |
|
100,000 |
100,000 |
|
|
|
|
|
|
| Management
fee on capital raised m prior years through RI |
|
| @
3% of net assets market value of the Fund in |
|
| proportion
of capital raised through RI to total |
|
1,193,717 |
1,651,498 |
|
| paid-up
capital, after charging management fee |
4.1 |
------------------ |
------------------ |
|
|
1,293,717 |
1,751,498 |
|
|
========== |
========== |
|
|
| 4.1
Market value of net assets at the close of financial |
|
| year
after charging management fee |
|
|
|
| Investments
in quoted shares |
|
3 |
87,604,188 |
62,343,146 |
|
| Long
term deposit |
|
|
100,000 |
100,000 |
|
|
|
|
|
| Current assets |
|
|
|
|
| Dividend
receivable |
|
|
600,000 |
525,000 |
|
| Prepaid
expenses |
|
|
-- |
7,500 |
|
| Current
account with the ICP |
|
|
5,712,782 |
5,946,104 |
|
| Advance
tax - net |
|
|
517,638 |
265,902 |
|
| Cash at bank |
|
|
224,980 |
-- |
|
|
|
------------------ |
------------------ |
|
|
7,055,400 |
6,744,506 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
94,759,588 |
69,187,652 |
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
13,400 |
19,338 |
|
| Unclaimed
dividend |
|
2,996,322 |
2,850,704 |
|
|
|
------------------ |
------------------ |
|
|
|
3,009,722 |
2,870,042 |
|
|
|
------------------ |
------------------ |
|
|
|
91,749,866 |
66,317,610 |
|
|
|
|
========== |
========== |
|
| 2000:
(91,749,866 x 30,000,000) |
@ 13% = |
|
1,651,498 |
|
|
50,000,000 |
|
|
========== |
|
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
Ford, Rhodes, |
Taseer Hadi |
2000 |
1999 |
|
|
|
Robson, Morrow |
Khalid & Co. |
Rupees |
Rupees |
|
|
|
|
|
| Audit fee |
|
2,950 |
2,950 |
5,900 |
5,900 |
|
|
| Out-of-pocket
expenses |
708 |
708 |
1,416 |
4,859 |
|
|
| Tax services |
|
-- |
28,145 |
28,145 |
4,515 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
3,658 |
31,803 |
35,461 |
15,274 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
Note |
|
| 7.
OTHER EXPENSES |
|
|
|
| Printing
and stationery |
|
17,683 |
