| Fourth 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 |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| NET ASSETS |
|
|
|
|
|
|
| Investment
in quoted shares |
|
3 |
56,309,592 |
66,792,123 |
|
| [Market
value Rs 114,791,515 (1998: Rs. 95,841,513)] |
|
|
|
|
| Security
deposit |
|
100,000 |
100,000 |
|
|
|
|
|
|
|
| Current assets |
|
|
|
| Dividend
receivable |
|
|
200,000 |
300,000 |
|
| Prepaid
expenses |
|
|
7,500 |
20,000 |
|
| Current
account with the Investment Corporation |
|
|
| of
Pakistan (ICP) |
|
|
8,902,893 |
10,770,499 |
|
| Taxation - net |
|
|
101,188 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,211,581 |
11,090,499 |
|
|
|
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
19,338 |
63,311 |
|
| Unclaimed
dividend |
|
3,367,843 |
16,619,315 |
|
| Dividend
payable |
|
10,000,000 |
-- |
|
| Taxation - net |
|
|
-- |
137,807 |
|
|
|
------------------ |
------------------ |
|
|
|
13,387,181 |
16,820,433 |
|
|
|
------------------ |
------------------ |
|
|
|
(4,175,600) |
(5,729,934) |
|
|
|
|
------------------ |
------------------ |
|
|
|
52,233,992 |
61,162,189 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 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 Rs10 each |
|
|
| fully
paid in cash |
|
50,000,000 |
50,000,000 |
|
|
|
|
| Revenue
reserve |
|
|
|
| Unappropriated
income |
|
2,233,992 |
11,162,189 |
|
|
|
------------------ |
------------------ |
|
|
|
52,233,992 |
61,162,189 |
|
|
|
|
========== |
========== |
|
|
| 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 |
|
|
7,903,417 |
6,939,861 |
|
| Return
on current account with the ICP |
|
|
529,736 |
355,501 |
|
| (Loss)
/ profit on sale of investment |
|
|
(1,300,960) |
23,137,523 |
|
| Other income |
|
|
8,350 |
14,063 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,140,543 |
30,446,948 |
|
|
|
|
| EXPENSES |
|
|
|
| Management
fee |
|
5 |
2,610,034 |
2,011,689 |
|
| Auditors'
remuneration |
|
6 |
14,730 |
12,130 |
|
| Diminution
in the value of investment |
|
|
3,349,012 |
-- |
|
| Other expenses |
|
7 |
210,594 |
326,607 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,184,370 |
2,350,426 |
|
| Provision
for Golden Handshake expenses |
|
|
-- |
(1,311,794) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
956,173 |
26,784,728 |
|
| INCOME
BEFORE TAXATION |
|
|
|
|
|
|
|
| TAXATION |
|
|
|
| Current |
|
8 |
-- |
460,000 |
|
| Prior |
|
|
|
(115,630) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
(115,630) |
460,000 |
|
|
|
------------------ |
------------------ |
|
| INCOME
AFTER TAXATION |
|
|
1,071,803 |
26,324,728 |
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
|
11,162,189 |
2,337,461 |
|
|
|
|
------------------ |
------------------ |
|
| AVAILABLE
FOR APPROPRIATION |
|
12,233,992 |
28,662,189 |
|
|
|
|
------------------ |
------------------ |
|
| Interim
dividend Nil (1998: @ 35%) |
|
-- |
17,500,000 |
|
| Final
divided @ 20% (1998: Nil) |
|
|
10,000,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
10,000,000 |
17,500,000 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
|
2,233,992 |
11,162,189 |
|
|
|
|
|
========== |
========== |
|
| BASIC
EARNINGS PER SHARE (CERTIFICATE) |
|
9 |
0.21 |
5.26 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 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 |
5,144,936 |
3,089,594 |
|
| Sale
of investment |
|
|
5,832,559 |
28,260,575 |
|
| Purchase
of investment |
|
|
-- |
(12,275,000) |
|
| Taxes paid |
|
|
(123,365) |
1437,903) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
|
10,854,130 |
28,637,266 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Security deposit |
|
|
|
|
-- |
(100,000) |
|
| Return
on current account with ICP |
|
529,736 |
335,501 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
529,736 |
255,501 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Dividend paid |
|
|
(13,251,472) |
(21,500,029) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from financing activities |
|
|
(13,251,472) |
(21,500,029) |
|
| NET
INCREASE/(DECREASE) IN CASH EQUIVALENT |
|
(1,867,606) |
7,392,738 |
|
|
|
|
|
------------------ |
------------------ |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
|
10,770,499 |
3,377,761 |
|
|
|
|
|
------------------ |
------------------ |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
11 |
8,902,893 |
10,770,499 |
|
|
|
|
========== |
========== |
|
|
|
|
|
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 Fourth ICP Mutual Fund was |
|
| established
by the Investment Corporation of Pakistan (ICP), acting as its Trustee, on
May 13, 1970 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 case where market value is lower than the carrying 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 basis
of the PLS rate declared half yearly by a bank on PLS |
|
| bank accounts. |
|
|
| 3.
INVESTMENT IN QUOTED SHARES |
|
| Unless
stated otherwise, the holdings are in the Ordinary shares of Rs. 10 each. |
|
|
| 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 |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
Modaraba |
|
| 54,000 |
54,000 |
First Grindlays Modaraba |
|
10.20 |
550,875 |
12.25 |
661,500 |
10.20 |
550,875 |
10.75 |
580,500 |
|
|
|
|
Banks/Investment Banks |
|
|
| 241,500 |
241,500 |
Askari Commercial Bank
Ltd. |
|
18.64 |
4,502,000 |
12.07 |
2,914,905 |
18.64 |
4,502,000 |
13.75 |
3,320,625 |
| 83,490 |
63,250 |
Bank Al-Habib Ltd. |
|
16.88 |
1,409,000 |
18.00 |
1,502,820 |
22.28 |
1,409,000 |
23.00 |
1,454,750 |
|
|
|
|
Textile Spinning |
|
|
| 10,000 |
10,000 |
Al Hamd Textile Mills
Ltd. |
|
3.50 |
35,000 |
4.00 |
40,000 |
3.50 |
35,000 |
4.50 |
45,000 |
|
|
|
|
Sugar and Allied |
|
|
| 47,333 |
45,079 |
Bawany Sugar Mills Ltd. |
|
11.50 |
544,200 |
10.48 |
496,050 |
12.07 |
544,200 |
12.67 |
571,151 |
| 18,150 |
16,500 |
Dewan Sugar Mills Ltd. |
|
17.75 |
322,162 |
17.75 |
322,162 |
32.50 |
536,250 |
19.00 |
313,500 |
|
|
|
|
Cement |
|
|
| 50,000 |
50,000 |
Cherat Cement Company
Ltd. |
|
19.21 |
960,340 |
13.00 |
650,000 |
19.21 |
960,340 |
10.20 |
510,000 |
| 30,000 |
30,000 |
Lucky Cement Ltd. |
|
3.82 |
114,600 |
3.82 |
114,600 |
13.30 |
398,900 |
3.90 |
117,000 |
|
|
|
|
Fuel and Energy |
|
|
| 71,795 |
71,795 |
Karachi Electric Supply
Corporation Ltd. |
4.84 |
347,208 |
8.67 |
622,463 |
4.84 |
347,208 |
8.42 |
604.514 |
| 70,000 |
70,000 |
National Refinery Ltd. |
|
14.76 |
1,033,500 |
30.37 |
2,125,900 |
14.76 |
1,033,500 |
15.50 |
1,085,000 |
| 803,390 |
669,492 |
Pakistan State Oil
Company Ltd. |
|
4.61 |
3,707,159 |
92.75 |
74,514,422 |
5.54 |
3,707,160 |
73.75 |
49,375,035 |
| 47,500 |
35,000 |
Shell Pakistan Ltd. |
|
134.71 |
5,398,600 |
163.00 |
7,742,500 |
137.06 |
4,797,150 |
146.50 |
5,127,500 |
| -- |
17,500 |
Shell Pakistan Ltd.
(Right) |
|
-- |
-- |
-- |
-- |
130.00 |
2,275,000 |
202.00 |
3,535,000 |
| 128,118 |
111,407 |
Sui Northern Gas
Pipelines Company Ltd. |
4.52 |
585,000 |
8.37 |
1,072,348 |
5.25 |
585,000 |
8.85 |
985,952 |
| 290,950 |
264,500 |
Sui Southern Gas Company
Ltd. |
|
23.21 |
6,752,000 |
8.60 |
2,502,170 |
25.53 |
6,752,000 |
9.00 |
2,380,500 |
|
|
|
|
|
Auto and Engineering |
|
|
|
|
| 66,125 |
66,125 |
Crescent Steel Mills Ltd. |
|
15.00 |
991,875 |
15.00 |
991,875 |
29.50 |
1,950,500 |
24.00 |
1,587,000 |
| 50,000 |
50,000 |
Pak Suzuki Motors Company
Ltd. |
|
43.43 |
2,171,300 |
25.00 |
1,250,000 |
43.43 |
2,171,300 |
34.00 |
1,700,000 |
|
|
|
|
|
|
Transport and
Communication |
|
|
| -- |
100,000 |
P.T.C.L. "A" |
|
-- |
-- |
-- |
-- |
33.87 |
3,386,750 |
15.77 |
1,577,000 |
|
|
|
|
|
|
|
|
|
Chemical and
Pharmaceutical |
|
|
|
|
|
|
| 875 |
14,375 |
Engro Chemicals Pakistan
Ltd. |
|
81.17 |
71,022 |
73.67 |
64,461 |
97.40 |
1,400,100 |
51.25 |
736,719 |
| 200,000 |
200,000 |
F.F.C Jordan Fertilizer
Company Ltd. |
14.24 |
2,847,525 |
11.25 |
2,250,000 |
14.24 |
2,847,525 |
12.97 |
2,594,000 |
| 50,000 |
50,000 |
Fauji Fertilizer Company
Ltd. |
|
41.17 |
2,058,500 |
41.17 |
2,058,500 |
79.01 |
3,950,500 |
51.37 |
2,568,500 |
| 900,097 |
982,097 |
ICI Pakistan Ltd. |
|
21.27 |
19,147,970 |
9.00 |
8,100,873 |
21.27 |
20,892,110 |
11.62 |
11,411,967 |
|
|
|
|
Paper and Board |
|
|
| 116,926 |
101,675 |
Packages Ltd. |
|
|
15.05 |
1,759,756 |
41.00 |
4,793,966 |
17.31 |
1,759,755 |
36.00 |
3,660,300 |
|
|
|
|
|
------------------ |
|
------------------ |
|
------------------ |
|
------------------ |
|
|
|
|
|
|
56,309,592 |
|
114,791,515 |
|
66,792,123 |
|
95,841,513 |
|
|
|
|
========== |
|
========== |
|
========== |
|
========== |
|
|
|
|
|
| *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 & |
Unappropriated |
|
|
|
|
paid-up capital |
Income |
Total |
|
|
|
Rupees |
Rupees |
Rupees |
|
|
|
|
| Balance
as at 30 June 1997 |
|
50,000,000 |
2,337,461 |
52,337,461 |
|
| Net
income for the year |
|
-- |
26,324,728 |
26,324,728 |
|
| Dividend |
|
|
-- |
(17,500,000) |
(17,500,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1998 |
|
50,000,000 |
11,162,189 |
61,162,189 |
|
| Net
income for the year |
|
-- |
1,071,803 |
1,071,803 |
|
| Dividend |
|
|
-- |
(10,000,000) |
(10,000,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1999 |
|
50,000,000 |
2,233,992 |
52,233,992 |
|
|
|
========== |
========== |
========== |
|
|
| 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 man- |
|
| agement
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. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Management
fee on initial paid-up capital @12% |
|
| 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 |
|
|
|
| 120,715,915
x 35,000,000 x 3% |
|
|
|
|
|
| 50,000,000 |
|
|
2,535,034 |
1,936,689 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
2,610,034 |
2,011,689 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 5.1
Net assets market value |
|
|
| Investment
in quoted shares |
|
|
3 |
114,791,515 |
95,841,513 |
|
| Security deposit |
|
|
|
100,000 |
100,000 |
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
| Dividend
receivable |
|
|
200,000 |
300,000 |
|
| Prepaid
expenses |
|
|
|
7,500 |
20,000 |
|
| Current
account with ICP |
|
|
8,902,893 |
12,782,188 |
|
| Taxation - net |
|
|
|
101,188 |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,211,581 |
13,102,188 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
124,103,096 |
109,043,701 |
|
|
|
|
| Current
liabilities |
|
|
|
|
| Accrued
expenses |
|
|
19,338 |
63,311 |
|
| Unclaimed
dividend |
|
|
3,367,843 |
16,619,315 |
|
| Taxation - net |
|
|
|
-- |
137,807 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
3,387,181 |
16,820,433 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
120,715,915 |
92,223,268 |
|
|
|
|
========== |
========== |
|
|
|
|
| 6.
AUDITORS' REMUNERATION |
|
|
|
|
Taseer Hadi |
Ford, Rhodes, |
1999 |
1998 |
|
|
|
|
Khalid & Co. |
Robson, Morrow |
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 |
|
|
|
Rupees |
Rupees |
|
| 7.
OTHER EXPENSES |
|
|
| Printing
and stationery |
|
|
14,688 |
60926 |
|
| Advertising
arid publicity |
|
|
11,518 |
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 |
|
|
-- |
7,400 |
|
| Computer
related expenses |
|
|
49,689 |
62,333 |
|
| Postage |
|
|
14,716 |
48,648 |
|
| Professional tax |
|
|
38,000 |
38,000 |
|
| Bank charges |
|
|
234 |
15,488 |
|
| Share
transfer stamps |
|
|
-- |
3,620 |
|
| Miscellaneous |
|
|
4,860 |
1,349 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
210,594 |
326,607 |
|
|
|
|
========== |
========== |
|
|
|
|
| 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 1998- |
|
| 99
In case of adverse decision of appeals for the assessment years, no material
tax liability is expected to arise. |
|
|
|
|
|
| 9.
BASIC EARNINGS PER SHARE (CERTIFICATE) |
|
| Income
after taxation |
|
|
1,071,803 |
26,324,728 |
|
|
|
|
========== |
========== |
|
| Number
of Certificates |
|
|
5,000,000 |
5,000,000 |
|
|
|
|
========== |
========== |
|
| Basic
earnings per share (certificate) |
|
