| Second ICP Mutual Fund |
|
|
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
|
|
|
|
If undelivered please
return to: |
|
| HEAD OFFICE: |
|
MUTUAL FUNDS DEPTT: |
|
| N.B.P.
Building, 5th Floor, |
|
Dawood Centre, Ground
Floor, |
|
| P.O. Box No. 5410, |
|
Moulvi Tamizuddin Khan
Road, Karachi. |
|
| I.I.
Chundrigar Road, Karachi. |
|
Phones: 5686014-15,
5685104-105 |
|
| Phones:
921-2360-69 |
|
Telex: 20079 ICP PK.
29223 ICP PK. |
|
| Telefax:
92-21-2388-89 |
|
Telefax: 92-021-5680035 |
|
| E-mail:
icp@paknet2-3.ptc.pk |
|
E-mail:
icpkb@paknet3.ptc.pk |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
Note |
1998 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
| NET ASSETS |
|
|
|
|
|
|
| Investment
in quoted shares |
|
3 |
49,917,006 |
55,453,912 |
|
| [Market
value Rs.40,738,040 (1998:Rs.43,004,297)] |
|
|
|
|
|
| Security
deposit |
|
|
|
100,000 |
100,000 |
|
|
|
|
|
| Current assets |
|
|
|
| Dividend
receivable |
|
|
|
741,047 |
900,000 |
|
| Prepaid
expenses |
|
|
|
7,500 |
20,000 |
|
| Current
account with the Investment Corporation |
|
|
| of
Pakistan (ICP) |
|
|
|
12,152,487 |
6,088,753 |
|
| Taxation - net |
|
|
|
635,235 |
635,657 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
13,536,269 |
7,644,410 |
|
|
|
|
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
|
|
19,338 |
48,811 |
|
| Unclaimed
dividend |
|
|
|
1,897,272 |
5,880,551 |
|
| Dividend
payable |
|
|
|
5,000,000 |
5,929,362 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,916,610 |
5,929,362 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,619,659 |
1,715,048 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
56,636,665 |
57,268,960 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| FINANCED BY |
|
|
|
| Capital
and Reserves |
|
|
|
| Capital |
|
|
|
|
| Authorised |
|
|
|
|
| 5,000,000
(1998: 5,000,000) Certificates of Rs. 10 each |
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
|
| 5,000,000
(1998: 5,000,000) Certificates of Rs. 10 each |
|
50,000,000 |
50,000,000 |
|
| fully
paid in cash |
|
|
|
|
|
|
| Revenue
reserve |
|
|
|
| General reserve |
|
|
|
150,000 |
150,000 |
|
| Unappropriated
income |
|
|
|
6,486,665 |
7,118,960 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
56,636,665 |
57,268,960 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for Investment Corporation of Pakistan |
|
|
|
ASADULLAH KHAWAJA |
|
ISTAQBAL MEHDI |
|
S.M. MUNEER |
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
|
| INCOME
AND EXPENDITURE ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| INCOME |
|
|
|
| Dividend |
|
|
3,758,806 |
3,601,060 |
|
| Return
on current account with the ICP |
|
|
692,773 |
701,026 |
|
| Profit
on sale of investment |
|
|
2,405,598 |
6,279,730 |
|
| Other income |
|
|
6,134 |
14,063 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,883,311 |
10,595,879 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| EXPENSES |
|
|
|
| Management
fee |
|
5 |
1,176,612 |
1038004 |
|
| Auditors'
remuneration |
|
6 |
14,730 |
12,130 |
|
| Diminution
in the value of investment |
|
|
1,040,061 |
-- |
|
| Other expenses |
|
7 |
224,014 |
277,218 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,455,417 |
1,327,350 |
|
|
|
|
| Reversal
of excess provision for Golden Handshake expenses |
|
-- |
5,855,006 |
|
|
|
------------------ |
------------------ |
|
| INCOME
BEFORE TAXATION |
|
4,407,894 |
15,123,535 |
|
|
|
|
|
| TAXATION |
|
|
|
| Current |
|
|
8 |
-- |
397,000 |
|
| Prior |
|
|
40,189 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
40,189 |
397,000 |
|
|
|
|
|
|
| INCOME
AFTER TAXATION |
|
4,367,705 |
14,725,535 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
|
7,118,960 |
1,392,425 |
|
|
|
|
------------------ |
------------------ |
|
| AVAILABLE
FOR APPROPRIATION |
|
11,486,665 |
16,118,960 |
|
|
|
|
| Interim
dividend Nil (1998: @ 18%) |
|
-- |
9,000,000 |
|
| Final
dividend @ 10% (1998: Nil) |
|
5,000,000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
5,000,000 |
9,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
|
6,486,665 |
7,118,960 |
|
|
|
|
========== |
========== |
|
| BASIC
EARNINGS PER SHARE (CERTIFICATE) |
9 |
0.87 |
2.95 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for Investment Corporation of Pakistan |
|
|
|
ASADULLAH KHAWAJA |
|
ISTAQBAL MEHDI |
|
S.M. MUNEER |
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
10 |
2,491,564 |
7,393,917 |
|
| Sale
of investment |
|
8,176,443 |
10,737,500 |
|
| Purchase
of investment |
|
(1,274,000) |
(13,434,926) |
|
| Taxes paid |
|
(39,767) |
(487,079) |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
9,354,240 |
4,209,410 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Security
deposit |
|
-- |
(100,000) |
|
| Return
on current account with ICP |
|
692,773 |
701,020 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
692,773 |
601,026 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Dividend paid |
|
(3,983,279) |
(7,721,343) |
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from financing activities |
|
(3,983,279) |
(7,721,343) |
|
|
|
------------------ |
------------------ |
|
| NET
INCREASE/(DECREASE) IN CASH EQUIVALENT |
|
6,093,734 |
(2,910,907) |
|
|
|
|
------------------ |
------------------ |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
|
6,088,753 |
8,999,660 |
|
|
|
|
========== |
========== |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
11 |
12,152,487 |
6,088,753 |
|
|
|
|
========== |
========== |
|
|
|
|
for Investment Corporation of Pakistan |
|
|
|
ASADULLAH KHAWAJA |
|
ISTAQBAL MEHDI |
|
S.M. MUNEER |
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
|
| In
order generally to broaden the base of investment and to encourage investment
in sound quoted shares, the 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 presentation |
|
|
|
| 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 eases where market value is lower than the earning value, the carrying
value is reduced to recognise decline, i.e., for a |
|
| period
not less than three years, to arrive at book value; |
|
|
|
|
|
| (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 current rates for taxation after
taking into account tax credits available, if any. |
|
|
|
|
| 2.5
Revenue recognition |
|
|
| (i)
Dividend income is recorded at the time of 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 |
|
|
|
| 1999 |
1998 |
|
1999 |
|
1998 |
|
| *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 |
|
|
|
|
|
|
Modaraba |
|
| 54,000 |
54,000 |
First Grindlays Modaraba |
|
9.65 |
521,200 |
12.25 |
661,500 |
9.65 |
521,200 |
10.75 |
580,500 |
|
|
|
|
Leasing |
|
|
| 8,750 |
7,000 |
Orix Leasing Company Ltd. |
|
39.35 |
344,350 |
26.00 |
227,500 |
49.19 |
344,350 |
30.00 |
210,000 |
|
|
|
|
|
|
|
|
Textile Spinning |
|
|
| 15,125 |
15,125 |
Gulshan Spinning Mills
Ltd. |
|
19.00 |
287,375 |
14.00 |
211,750 |
19.00 |
287,375 |
15.00 |
226,875 |
|
|
|
|
|
|
|
|
Sugar and Allied |
|
|
| -- |
286,497 |
Habib Sugar Mills Ltd.
(Rs. 5) |
|
-- |
-- |
-- |
-- |
5.27 |
1,509,293 |
7.50 |
2,148,728 |
| 141,047 |
141,047 |
Mehran Sugar Mills Ltd. |
|
11.00 |
1,551,517 |
11.00 |
1,551,517 |
16.83 |
2,373,578 |
11.75 |
1,657,302 |
| 22,000 |
22,000 |
Sanghar Sugar Mills Ltd. |
|
7.00 |
154,000 |
7.00 |
154,000 |
16.91 |
372,000 |
8.50 |
187,000 |
|
|
|
|
Cement |
|
|
| 71,286 |
101,286 |
Cherat Cement Company
Ltd. |
|
6.38 |
455,115 |
13.00 |
926,718 |
6.39 |
646,816 |
10.20 |
1,033,117 |
| 105,000 |
105,000 |
Dadabhoy Cement
Industries Ltd. |
8.00 |
840,000 |
4.25 |
446,250 |
8.00 |
840,000 |
3.50 |
367,500 |
| 18,200 |
18,200 |
Gharibwal Cement
Industries Ltd. |
|
2.98 |
54,199 |
4.25 |
77,350 |
2.98 |
54,199 |
5.00 |
91,000 |
|
|
|
|
Fuel and Energy |
|
|
| 150,000 |
75,000 |
Hub Power Company Ltd. |
|
30.13 |
4,519,500 |
14.07 |
2,110,500 |
43.27 |
3,245,500 |
12.37 |
927,750 |
| 183,551 |
183,551 |
Karachi Electric Supply
Corporation Ltd. |
4.25 |
780,162 |
8.67 |
1,591,387 |
4.25 |
780,162 |
8.42 |
1,545,499 |
| 72,000 |
77,000 |
National Refinery Ltd. |
|
10.32 |
743,286 |
30.37 |
2,186,640 |
10.32 |
794,886 |
15.50 |
1,193,500 |
| 22,698 |
18,915 |
Pakistan State Oil
Company Ltd. |
|
181.30 |
4,115,171 |
92.75 |
2,105,240 |
217.56 |
4,115,170 |
73.75 |
1,394,981 |
| 32,700 |
25,000 |
Shell Pakistan Ltd. |
|
137.74 |
4,503,998 |
163.00 |
5,350,100 |
141.61 |
3,540,150 |
146.50 |
3,662,500 |
| -- |
12,500 |
Shell Pakistan Ltd.
(Right) |
|
-- |
-- |
-- |
-- |
130.00 |
1,625,000 |
202.00 |
2,525,000 |
| 123,190 |
107,122 |
Sui Northern Gas
Pipelines Company Ltd. |
4.57 |
562,500 |
8.37 |
1,031,100 |
5.25 |
562,500 |
8.85 |
948,030 |
|
|
|
|
|
|
Auto and Engineering |
|
|
| 100,000 |
100,000 |
Pak Suzuki Motors Company
Ltd. |
43.65 |
4,364,500 |
25.00 |
2,500,000 |
43.65 |
4,364,500 |
34.00 |
3,400,000 |
|
|
|
|
|
|
Transport and
Communication |
|
|
| 100,000 |
100,000 |
P.T.C.L. "A" |
|
33.25 |
3,325,000 |
20.02 |
2,002,000 |
33.25 |
3,325,000 |
15.77 |
1,577,000 |
|
|
|
|
|
|
|
|
|
Chemical and
Pharmaceutical |
|
|
|
|
|
|
|
| 10,235 |
8,900 |
BOC Pakistan Limited |
|
129.57 |
1,326,189 |
81.00 |
829,035 |
149.01 |
1,326,189 |
90.00 |
801,000 |
| 47,974 |
73,312 |
Engro Chemicals Pakistan
Ltd |
|
82.60 |
3,962,430 |
73.67 |
3,534,245 |
99.11 |
7,266,180 |
51.25 |
3,757,240 |
| 150,000 |
150,000 |
Fauji Fertilizer Company
Ltd. |
|
75.60 |
11,339,705 |
41.17 |
6,175,500 |
75.60 |
11,339,705 |
51.37 |
7,705,500 |
| 116,500 |
116,500 |
F.F.C. Jordan Fertilizer
Company Ltd. |
20.18 |
2,350,475 |
11.25 |
1,310,625 |
20.18 |
2,350,475 |
12.97 |
1,511,005 |
| 212,227 |
212,227 |
ICI Pakistan Ltd. |
|
10.00 |
2,123,314 |
9.00 |
1,910,043 |
10.00 |
2,123,314 |
11.62 |
2,466,078 |
|
|
|
|
|
|
|
|
|
Paper and Board |
|
|
|
|
|
|
|
| 20,100 |
20,100 |
Cherat Papersack Company
Ltd. |
|
44.06 |
885,555 |
38.00 |
763,800 |
44.06 |
885,555 |
28.00 |
562,800 |
| 75,640 |
70,122 |
Packages Ltd. |
|
10.68 |
807,465 |
41.00 |
3,101,240 |
12.28 |
860,815 |
36.00 |
2,524,392 |
|
|
|
------------------ |
|
------------------ |
|
------------------ |
|
------------------ |
|
|
|
49,917,006 |
|
40,738,040 |
|
55,453,912 |
|
43,004,297 |
|
|
========== |
|
========== |
|
========== |
|
========== |
|
|
|
|
|
|
|
| *
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.
STATEMENT OF CHANGES IN EQUITY |
|
|
|
|
|
Issued, |
|
|
|
|
subscribed & |
General |
Unappropriated |
Total |
|
|
|
paid-up capital |
reserve |
Income |
|
|
|
|
Rupees |
Rupees |
Rupees |
|
|
|
|
|
|
| Balance
as at 30 June 1997 |
|
50,000,000 |
150,000 |
1,392,425 |
51,542,425 |
|
| Net
Income for the year |
|
-- |
-- |
14,726,535 |
14,726,535 |
|
| Dividend |
|
|
-- |
-- |
(9,000,000) |
(9,000,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1998 |
|
50,000,000 |
150,000 |
7,118,960 |
57,268,960 |
|
| Not
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 |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 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 |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| Management
Fee on |
|
|
| initial
paid-up capital |
|
|
| @ 1/2% on Rs. 15 million |
|
|
75,000 |
75,000 |
|
|
|
|
| Management
fee on capital raised through right issue |
|
| @3% of net assets market
value of the Fund |
|
| 52,457,699
x 35,000,000 x 3% |
|
|
| 50,000,000 |
|
|
1,101,612 |
963,004 |
|
|
|
|
------------------ |
------------------ |
|
|
|
1,176,612 |
1,038,004 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 5.1
Net assets market value |
|
|
| Investment
in quoted shares |
|
3 |
40,738,040 |
43,004,297 |
|
| Security
deposit |
|
|
100,000 |
100,000 |
|
|
|
|
| Current assets |
|
|
|
| Dividend
receivable |
|
|
741,047 |
900,000 |
|
| Prepaid
expenses |
|
|
7,500 |
20,000 |
|
| Current
account with the ICP |
|
|
12,152,487 |
7,126,757 |
|
| Taxation - net |
|
|
|
635,235 |
635,657 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
13,536,269 |
8,682,414 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
54,374,309 |
51,786,711 |
|
| Current
Liabilities |
|
|
| Accrued
expenses |
|
|
|
19,338 |
48,811 |
|
| Unclaimed
dividend |
|
|
1,897,272 |
5,880,551 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,916,610 |
5,929,362 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
52,457,699 |
45,857,349 |
|
|
|
|
========== |
========== |
|
|
|
|
| 6.
AUDITORS' REMUNERATION |
|
|
Taseer Hadi |
Ford, Rhodes, |
1999 |
1998 |
|
|
Khalld & Co. |
Robson, Morrow |
Rupees |
Rupees |
|
|
Rupees |
Rupees |
|
|
|
|
|
| Audit fee |
|
|
2,950 |
2,950 |
5,900 |
5,130 |
|
| Tax services |
|
|
8,830 |
-- |
8,830 |
7,000 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
11,780 |
2,950 |
14,730 |
12,130 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
|
| 7.
OTHER EXPENSES |
|
|
|
| Printing
and stationery |
|
|
7,623 |
46,085 |
|
| Advertising
and publicity |
|
|
3,185 |
17,276 |
|
| Professional
charges |
|
|
3,558 |
12,817 |
|
| Listing
fee - stock exchanges |
|
|
46,250 |
46,250 |
|
| - Central Depository
Company |
|
27,081 |
12,500 |
|
| Excise duty |
|
|
-- |
3,400 |
|
| Computer
related expenses |
|
|
51,536 |
51,888 |
|
| Postage |
|
|
14,716 |
42,186 |
|
| Professional tax |
|
|
|
38,000 |
38,000 |
|
| Bank charges |
|
|
|
5,455 |
4,130 |
|
| Share
transfer stamps |
|
|
21,750 |
1,325 |
|
| Miscellaneous |
|
|
|
4,860 |
1,359 |
|
|
|
------------------ |
------------------ |
|
|
|
224,014 |
277,216 |
|
|
|
|
========== |
========== |
|
|
| 8. TAXATION |
|
|
| The
income-tax assessment of the Fund have been finalised upto and including
assessment year 1998-99. However, the Fund has filed |
|
| appeals
before the Commissioner of Income Tax (Appeals), relating to assessment years
1993-94, 1994-95, 1995-96, 1996-97 and |
|
