| Eighth ICP Mutual Fund |
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| 24th
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: |
|
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 |
|
| 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 24th 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: |
|
|
|
|
(Rs. '000') |
|
|
| Net
Income before Taxation |
|
3,463 |
|
| Taxation |
|
|
-- |
|
|
|
|
------------------ |
|
| Net
Income after Taxation |
|
3,463 |
|
| Un-appropriated
income B/F |
|
12,340 |
|
|
|
|
------------------ |
|
| Available
for Appropriation |
|
15,803 |
|
| Cash
Dividend (20%) |
|
10,000 |
|
| Un-appropriated
Income carried forward to |
|
|
|
| Revenue
Reserve |
|
5,503 |
|
|
|
|
|
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| Basic
Earning per certificate (in rupees) |
|
0.69 |
|
|
|
|
| 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 wont 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 Eighth Mutual Fund earned total income of Rs. 10.90
million including dividend income of Rs.5.80 |
|
| million.
Net income for the year after incurring expenditure of Rs. 3.84 million and
Rs. 3.59 million on account of diminution in |
|
| the
value of investments amounted to Rs. 3.47 million. NAV's worked out at Rs.
29.15 per certificate as compared to Rs. 20.58 |
|
| last year |
|
|
|
| Future
Prospects |
|
| The
stock market situation is likely to improve due to Government's steady
measures to strengthen capital market. Such measures |
|
| 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 its |
|
| 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 |
|
| In
the end we wish to express our thanks to all our certificate holders, bankers
and other financial institutions for their continued |
|
| support. |
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|
|
|
for the Investment Corporation of Pakistan |
|
|
|
ISTAQBAL MEHDI |
|
SYED LIAQUAT ALI |
|
M. SALEEM SHAIKH |
|
|
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 |
|
|
|
| Investment in quoted shares |
|
3 |
55,912,538 |
61,124,838 |
|
| [Market
value Rs.136,272,118 (1999: Rs.101,653,607) |
|
|
|
|
|
| Security deposit |
|
100,000 |
100,000 |
|
|
| Current assets |
|
| Dividend
receivable |
|
|
1,729,786 |
1,166,026 |
|
| Prepaid
expenses |
|
|
-- |
7,500 |
|
| Current
account with the Investment Corporation |
|
|
|
| of
Pakistan (ICP) |
|
|
8,946,418 |
18,973,846 |
|
| Taxation - net |
|
|
412,356 |
164,083 |
|
| Cash at bank |
|
|
524,980 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
11,613,540 |
20,311,455 |
|
|
|
|
| Current
liabilities |
|
| Accrued
expenses |
|
|
13,400 |
19,338 |
|
| Unclaimed
dividend |
|
|
1,684,758 |
1,552,430 |
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| Dividend
payable |
|
|
10,000,000 |
17,500,000 |
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|
|
|
------------------ |
------------------ |
|
|
|
|
11,698,158 |
19,071,768 |
|
|
|
------------------ |
------------------ |
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|
|
|
(84,618) |
1,239,687 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
55,927,920 |
62,464,525 |
|
|
|
|
========== |
========== |
|
|
|
|
| FINANCED BY |
|
| Capital
and Reserves |
|
| Capital |
|
| Authorised |
|
| 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 in paid in cash |
50,000,000 |
50,000,000 |
|
|
| Revenue
reserve |
|
| Special reserve |
|
|
125,000 |
125,000 |
|
| Unappropriated
income |
|
5,802,920 |
12,339,525 |
|
|
|
------------------ |
------------------ |
|
|
Rupees |
55,927,920 |
62,464,525 |
|
|
========== |
========== |
|
|
| 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 |
|
|
|
| INCOME
AND EXPENDITURE ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
| INCOME |
|
| Dividend |
|
|
5,795,801 |
6,047,292 |
|
| Return
on current account with the ICP |
|
1,542,023 |
1,500,386 |
|
| Profit
on sale of investments |
|
3,559,455 |
14,563,570 |
|
| Other income |
|
|
-- |
2,327 |
|
|
|
------------------ |
------------------ |
|
|
|
10,897,279 |
22,113,575 |
|
|
| EXPENDITURE |
|
| Management
fee |
|
4 |
3,560,900 |
2,941,839 |
|
| Auditors'
remuneration |
|
5 |
21,335 |
14,730 |
|
| Diminution
in the value of investments |
|
3,589,080 |
-- |
|
| Other expenses |
|
6 |
262,569 |
212,945 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,433,884 |
3,169,514 |
|
|
|
|
------------------ |
------------------ |
|
| INCOME
BEFORE TAXATION |
|
|
3,463,395 |
18,944,061 |
|
|
|
|
|
|
| TAXATION
- Prior |
|
7 |
-- |
(274,630) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
-- |
(274,630) |
|
|
| NET
INCOME AFTER TAXATION |
|
3,463,395 |
19,218,691 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
12,339,525 |
10,620,834 |
|
|
|
|
------------------ |
------------------ |
|
| AVAILABLE
FOR APPROPRIATION |
|
15,802,920 |
29,839,525 |
|
| Final
dividend @ 20% (1999: 35%) |
|
|
10,000,000 |
17,500,000 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
Rupees |
5,802,920 |
12,339,525 |
|
|
|
|
========== |
========== |
|
| BASIC
EARNINGS PER SHARE (CERTIFICATE) |
8 |
0.69 |
3.84 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form in 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 |
1,388,799 |
2,386,726 |
|
| Sale
of investments |
|
|
5,986,175 |
16,960,225 |
|
| Purchase
of investments |
|
|
(803,500) |
(9,415,660) |
|
| Taxes paid |
|
|
|
(248,273) |
(339,475) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
6,323,201 |
9,591,816 |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Return
on current account with the ICP |
|
1,542,023 |
1,500,386 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
1,542,023 |
1,500,386 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Dividend paid |
|
|
|
(17,367,672) |
( 11,509,809) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
(17,367,672) |
(11,509,809) |
|
|
|
|
------------------ |
------------------ |
|
| NET
(DECREASE) IN CASH & CASH EQUIVALENTS |
(9,502,448) |
(417,607) |
|
| CASH
& CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
18,973,846 |
19,391,453 |
|
|
|
|
|
------------------ |
------------------ |
|
| CASH
& CASH EQUIVALENTS AT THE END OF THE YEAR |
10 Rupees |
9,471,398 |
18,973,846 |
|
|
|
========== |
========== |
|
|
|
|
| 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 |
Rupees |
|
|
|
|
| Balance
as at 30 June 1998 |
|
50,000,000 |
125,000 |
10,620,834 |
60,745,834 |
|
| Net
Income for the year |
|
-- |
-- |
19,218,691 |
19,212,691 |
|
| Dividend |
|
-- |
-- |
(17,500,000) |
(17,500,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1999 |
|
50,000,000 |
125,000 |
12,339,525 |
62,464,525 |
|
| Net
Income for the year |
|
-- |
-- |
3,463,395 |
3,463,395 |
|
| Dividend |
|
-- |
-- |
(10,000,000) |
(10,000,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
Rupees |
50,000,000 |
125,000 |
5,802,920 |
55,927,920 |
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| 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 companies
quoted on the stock exchanges in the country, |
|
| the
Eight ICP Mutual Fund was established by the Investment Corporation of
Pakistan (ICP), acting as its Trustee, on May 17, |
|
| 1976,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. |
|
|
| 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 recognize other than temporary |
|
| decline,
i.e. for a period not less than three years, in order to arrive at their book
value; end |
|
|
| 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 raceme at 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 |
|
LEASING |
|
|
| 31,200 |
31,200 |
Pakistan Industrial
Leasing |
11.35 |
354,380 |
7.00 |
218,400 |
11.36 |
354,380 |
5.00 |
156,000 |
|
Corporation Ltd. |
|
|
|
|
|
|
|
|
|
|
|
|
|
BANKS/INVESTMENT BANKS |
|
| 140,750 |
140,750 |
Askari Commercial Bank
Ltd. |
17.74 |
2,497,000 |
13.88 |
1,953,610 |
17.74 |
2,497,000 |
12.07 |
1,698,852 |
|
|
|
|
TEXTILE SPINNING |
|
| 20,600 |
-- |
Umer Fabrics Limited |
27.64 |
569,500 |
16.25 |
334,750 |
-- |
-- |
-- |
-- |
|
|
|
|
CEMENT |
|
|
| 52,000 |
52,000 |
Cherat Cement Company
Ltd. |
20.07 |
1,043,660 |
21.48 |
1,116,960 |
20.07 |
1,043,660 |
13.00 |
676,000 |
| 50,000 |
50,000 |
Pakland Cement Ltd. |
13.01 |
650,500 |
6.10 |
305,000 |
13.01 |
650,500 |
4.75 |
237,500 |
|
|
|
|
FUEL AND ENERGY |
|
| 236,908 |
236,908 |
Karachi Electric Supply
Corporation Ltd. |
18.97 |
4,494,868 |
9.53 |
2,257,733 |
18.97 |
4,494,868 |
8.67 |
2,053,992 |
| 174,900 |
152,087 |
Sui Northern Gas
Pipelines Company Ltd. |
24.53 |
4,291,000 |
16.10 |
2,815,890 |
28.21 |
4,291,000 |
8.37 |
1,272,968 |
| 4,032,058 |
3,549,616 |
Sui Southern Gas Company
Ltd. |
3.70 |
14,939,400 |
16.38 |
66,045,110 |
4.26 |
15,124,900 |
8.60 |
30,526,698 |
| 25,000 |
75,000 |
Hub Power Company Limited |
13.34 |
333,500 |
14.70 |
367,500 |
13.34 |
1,000,500 |
14.07 |
1,055,250 |
| 1,200 |
6,000 |
Pakistan State Oil Co.
Ltd. |
41.45 |
49,740 |
163.10 |
195,720 |
49.75 |
298,500 |
92.75 |
556,500 |
| 20,000 |
25,000 |
Shell Pakistan Ltd. |
161.80 |
3,236,000 |
167.63 |
5,352,600 |
161.80 |
4,045,000 |
163.00 |
4,075,000 |
|
|
|
|
TRANSPORT AND
COMMUNICATION |
|
|
| 125,000 |
125,000 |
P.T.C.L. "A" |
|
31.50 |
3,937,500 |
27.08 |
3,385,000 |
31.50 |
3,937,500 |
20.02 |
2,502,500 |
|
|
|
|
|
|
|
CHEMICAL AND
PHARMACEUTICALS |
|
|
| 11,500 |
11,500 |
BOC Pakistan Ltd. |
129.57 |
1,490,100 |
114.00 |
1,311,000 |
129.57 |
1,490,100 |
81.00 |
931,500 |
| 11,520 |
4,520 |
Dawood Hercules Chemical
Ltd. (Rs. 5) |
58.05 |
668,800 |
80.00 |
921,600 |
58.06 |
668,800 |
102.00 |
1,175,040 |
| 427,539 |
430,539 |
Engro Chemicals Pakistan
Ltd. |
10.82 |
4,626,382 |
59.33 |
25,365,889 |
10.82 |
4,658,842 |
73.67 |
31,717,808 |
| 179,000 |
179,000 |
Fauji Fertilizer Company
Limited |
39.58 |
7,084,820 |
39.58 |
7,084,820 |
59.63 |
10,673,900 |
41.17 |
7,369,430 |
| 356,000 |
381,000 |
ICI Pakistan Limited |
10.00 |
3,560,000 |
15.13 |
5,386,280 |
10.00 |
3,810,000 |
9.00 |
3,429,000 |
|
|
|
|
|
|
|
PAPER AND BOARD |
|
|
|
| 11,501 |
11,502 |
Packages Ltd. |
|
10.49 |
120,668 |
60.25 |
692,935 |
10.49 |
120,668 |
41.00 |
471,582 |
|
|
|
|
|
|
|
LEATHER AND TENNARIES |
|
|
|
| 293,333 |
293,333 |
Service Industries
(Shoes) Ltd. |
6.69 |
1,964,720 |
38.05 |
11,161,321 |
6.70 |
1,964,720 |
40.05 |
11,747,987 |
|
|
|
|
------------------ |
|
------------------ |
|
------------------ |
|
------------------ |
|
|
|
Rupees |
55,912,538 |
|
136,272,118 |
|
61,124,838 |
|
101,653,607 |
|
|
|
|
========== |
|
========== |
|
========== |
|
========== |
|
|
|
|
|
|
| *
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 |
|
50,000 |
50,000 |
|
|
|
| paid-up
capital of Rs. 10 million |
|
|
| Management
fee on capital raised through right issue |
|
| @ 3% of net assets
market value of the Fund |
|
3,510,900 |
2,891,839 |
|
| 146,287,500 x
40,000,000 x
3% |
|
------------------ |
------------------ |
|
|
|
50,000,000 |
|
Rupees |
3,560,900 |
2,941,839 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
| 4.1
Market value of net assets at the close of the year |
|
| Investment
in quoted shares |
|
3 |
136,272,118 |
101,653,607 |
|
|
|
| Long
term deposit |
|
100,000 |
100,000 |
|
|
|
|
| Current assets |
|
|
|
| Dividend
receivable |
|
1,729,786 |
1,166,026 |
|
| Prepaid
expenses |
|
-- |
7,500 |
|
|
|
| Current
account with the ICP |
|
8,946,418 |
18,973,846 |
|
| Taxation-net |
|
412,356 |
164,083 |
|
| Cash at bank |
|
524,980 |
-- |
|
|
------------------ |
------------------ |
|
|
|
|
11,613,540 |
20,311,455 |
|
|
------------------ |
------------------ |
|
|
|
|
147,985,658 |
122,065,062 |
|
|
|
|
| Current
Liabilities |
|
|
|
| Accrued
expenses |
|
13,400 |
19,338 |
|
| Unclaimed
dividend |
|
1684758 |
1,552,430 |
|
|
|
|
------------------ |
------------------ |
|
|
1,698,158 |
1,571,768 |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
Rupees |
146,287,500 |
120,493,294 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
Taseer Hadi |
Ford, Rhodes, |
2000 |
1999 |
|
|
|
|
Khalid & Co. |
Robson, Morrow |
Rupees |
Rupees |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
|
|
|
|
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
|
| Audit fee |
|
2,950 |
2,950 |
5,900 |
5,900 |
|
|
|
| Tax services |
|
15,435 |
-- |
15,435 |
8,830 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
Rupees |
18,385 |
2,950 |
21,335 |
14,730 |
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
| 6.
OTHER EXPENSES |
|
| Printing
and stationery |
|
8,529 |
7,537 |
|
| Advertising
and publicity |
|
2,373 |
11,518 |
|
| Professional
charges |
|
-- |
3,558 |
