| 3RD ICP MUTUAL FUND |
|
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|
|
|
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|
|
|
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|
|
| 28TH
ANNUAL REPORT 1997 |
|
|
|
|
| INVESTMENT
CORPORATION |
|
| OF PAKISTAN |
|
|
| 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:
2415860-10 Lines Telex: 20079 ICP PK. |
Telex: 20079 ICP PK.
29223 ICP PK. |
|
| 29223
ICP PK. Telefax: 92-021-2411684 |
Telefax: 92-021-5680035 |
|
|
|
|
| Balance
Sheet as at 30th June, 1997 |
|
|
|
|
Note |
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
| NET ASSETS |
|
|
|
|
|
|
| Investment
in quoted shares |
|
|
| [Market
Value Rs. 100,890,456 |
|
|
| (1996:
Rs. 91,618,729)] |
|
3 |
49,582,285 |
27,420,884 |
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
| Dividend
receivable |
|
60,000 |
- |
|
| Prepaid
expenses |
|
7,500 |
2.50 |
|
| Current
account with the |
|
|
| Investment
Corporation of Pakistan (ICP) |
|
11,131,577 |
4,199,754 |
|
|
|
---------- |
---------- |
|
|
|
11,199,077 |
4,202,254 |
|
| Current
Liabilities |
|
|
|
|
|
|
|
|
| Accrued
expenses |
|
55,2131 |
8,347 |
|
| Unclaimed
dividend |
|
7,026,560 |
5,819,108 |
|
| Taxation
- net |
|
395,955 |
32,167 |
|
| Proposed
dividend |
|
- |
5,000,000 |
|
|
|
---------- |
---------- |
|
|
|
7,477,728 |
10,859,622 |
|
|
|
---------- |
---------- |
|
|
|
3,721,349 |
(6,657,368) |
|
|
|
---------- |
---------- |
|
|
|
53,303,634 |
20,763,516 |
|
|
|
|
|
========== |
========== |
|
| FINANCED BY |
|
|
|
|
|
| Capital
and Reserve |
|
|
|
| Capital |
|
|
|
| Authorised |
|
|
|
| 5,000,000
(1996: 5,000,000) Certificates of |
|
| Rs.
10/- each |
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
Subscribed and Paid-up |
|
|
| 5,000,000
(1996: 2,000,000) certificates of |
|
| Rs.
10/- each fully paid in cash |
|
50,000,000 |
20,000,000 |
|
|
|
|
| Revenue
reserve |
|
|
|
| Unappropriated
income |
|
3,303,634 |
763,516 |
|
|
|
---------- |
---------- |
|
|
|
53,303,634 |
20,763,516 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| for
THE INVESTMENT CORPORATION OF PAKISTAN |
|
|
|
|
| ASADULLAH
KHAWAJA |
ZAHEER AHMED |
|
S.M. MUNEER |
|
| Managing
Director |
Director |
|
Director |
|
|
|
|
|
|
|
|
| Income
and Expenditure Account for the year ended 30th June, 1997 |
|
|
|
|
|
|
Note |
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
| INCOME |
|
|
|
|
|
|
| Dividend |
|
|
|
2,889,536 |
1,600,926 |
|
| Return
on current account with ICP |
|
|
789,939 |
89,869 |
|
| Profit
on sale of investment |
|
|
8,343,077 |
9,576,925 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
12,022,552 |
11,267,720 |
|
|
|
|
|
|
|
| EXPENSES |
|
|
|
|
|
|
---------- |
---------- |
|
| Management
fee |
|
4 |
1,532,954 |
100,000 |
|
| Auditor's
remuneration |
|
5 |
9,565 |
9,214 |
|
| Diminution
in the value of investment |
|
|
- |
- |
|
| Expenses
incurred in respect of issue of right certificates |
6 |
712,174 |
156,560 |
|
| Other
expenses |
|
7 |
363,953 |
209,545 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
2,618,646 |
475,319 |
|
|
|
|
|
|
---------- |
---------- |
|
| Income
before taxation |
|
|
|
9,403,906 |
10,792,401 |
|
| Taxation |
|
|
|
|
|
| Current
year |
|
8 |
363,788 |
107,931 |
|
| Prior year |
|
|
|
- |
77,332 |
|
|
|
|
---------- |
---------- |
|
|
|
363,788 |
185,263 |
|
|
|
---------- |
---------- |
|
| Net
Income for the year |
|
9,040,118 |
10,607,138 |
|
| Unappropriated
income brought forward |
|
763,516 |
156,378 |
|
|
|
---------- |
---------- |
|
| Available
for appropriation |
|
9,803,634 |
10,763,516 |
|
| Interim
dividend @ 13% (1996: 25%) on 5,000,000 |
|
|
|
| (1996:
2,000,000) Certificates of Rs. 10/- each) |
|
6,500,000 |
5,000,000 |
|
|
|
|
| Final
proposed dividend Nil (1996: 10%) |
|
|
| on
5,000,000 certificates of Rs. 10/- each |
|
- |
5,000,000 |
|
|
|
---------- |
---------- |
|
|
|
|
|
6,500,000 |
10,000,000 |
|
|
|
|
|
---------- |
---------- |
|
| Unappropriated
income carried forward |
|
3,303,634 |
763,516 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| for
THE INVESTMENT CORPORATION OF PAKISTAN |
|
|
| ASADULLAH
KHAWAJA |
ZAHEER AHMED |
S.M. MUNEER |
|
| Managing
Director |
Director |
|
Director |
|
|
|
|
| Cash
Flow Statement for the year ended 30th June, 1997 |
|
|
|
|
Note |
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
| Cash
generated from operations |
|
9 |
252,757 |
1,185,809 |
|
| Sale
of investment |
|
|
12,142,966 |
16,842,500 |
|
| Purchase
of investment |
|
|
(25,961,290) |
(7,223,500) |
|
| Taxes paid |
|
|
- |
(175,479) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from operating activities |
|
(13,565,567) |
10,629,330 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Return
on current account ICP |
|
|
789,938 |
89.87 |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow from investing activities |
|
|
789,938 |
89.87 |
|
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Issue
of Right Certificates |
|
|
30,000,000 |
- |
|
| Dividend
paid |
|
|
(10,292,548) |
(6,443,903) |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from financing activities |
|
19,707,452 |
(6,443,903) |
|
|
|
|
---------- |
---------- |
|
| NET
INCREASE/(INCREASE) IN CASH EQUIVALENT |
|
6,931,823 |
4,275,296 |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
|
4,199,754 |
(75,542) |
|
|
|
|
---------- |
---------- |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
|
10 |
11,131,577 |
4,199,754 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| Notes
to the Accounts for the year ended 30th June, 1997 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| In
order generally to broaden the base of investments and to encourage
investment in sound quoted shares, the Third ICP |
|
| Mutual
Fund was floated by Investment Corporation of Pakistan. acting as trustee to
the Fund, and the Fund is listed on stock |
|
| exchanges
in Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Investment |
|
|
|
|
| i)
Investments is valued at average cost where cost is lower than the market
value; |
|
| ii)
in case 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
book value: |
|
| 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 the current rates for taxation
after taking into account tax credits |
|
| available.
if any. |
|
|
|
|
| 2.4
Revenue recognition |
|
| i)
Dividend income is recorded at the lime 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.
INVESTMENTS IN QUOTED SHARES |
|
| Unless
stated otherwise the holdings are in the ordinary shares of Rs. 10/- each. |
|
|
|
|
|
|
|
|
|
1997 |
|
1996 |
|
| 1997 |
1996 |
|
---------------------------------------------- |
---------------------------------------------- |
|
| -------------------- |
|
Book Value |
Market Value |
Book Value |
Market Value |
|
| *Holding |
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
| No of shares |
Name of the Company |
|
**Rate |
Amount |
**Rate |
Amount |
**Rate |
Amount |
**Rate |
Amount |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
|
|
|
|
MODARABA |
|
|
| 50,000 |
- |
First Grindlays Modaraba |
|
10.38 |
519,000 |
11.50 |
575,000 |
- |
- |
- |
- |
|
|
|
|
|
LEASING |
|
|
| 25,000 |
- |
Orix Leasing Co. Ltd. |
|
49.30 |
1,232,500 |
40.75 |
1,018,750 |
- |
- |
- |
- |
|
|
|
|
|
|
|
INVESTMENT BANK |
|
|
| 55,000 |
- |
Bank AI-Habib Ltd. |
|
25.62 |
1,409,100 |
28.50 |
1,567,500 |
- |
- |
- |
- |
|
|
|
|
|
|
TEXTILE COMPOSITE |
|
|
| 32,000 |
32,000 |
Burewala Textile Mills
Ltd. |
|
30.90 |
988,800 |
27.00 |
864,000 |
30.90 |
988,800 |
24.75 |
792,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
SYNTHENTIC & RAYON |
|
|
| 22,800 |
22,800 |
Dewan Salman Fibre Ltd. |
|
85.92 |
1,958,900 |
35.30 |
804,840 |
85.92 |
1,958,900 |
42.00 |
957,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
SUGAR |
|
|
| 93,321 |
77,768 |
Habib Sugar Mills Ltd. |
|
7.96 |
742,510 |
11.50 |
1,073,192 |
9.55 |
742,510 |
13.25 |
1,030,426 |
|
| 55,425 |
55,425 |
Mirpur Khas Sugar Mills
Ltd. |
|
15.32 |
848,843 |
16.50 |
914,513 |
15.32 |
848,843 |
19.00 |
1,053,075 |
|
| 169,156 |
169,156 |
Shahtaj Sugar Mills Ltd. |
|
13.15 |
2,224,779 |
22.40 |
3,789,094 |
13.15 |
2,224,779 |
23.50 |
3,975,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CEMENT |
|
|
| 30,000 |
- |
Lucky Cement Co. Ltd. |
|
13.38 |
401,400 |
7.85 |
235,500 |
- |
- |
- |
- |
|
|
|
|
|
FUEL & ENERGY |
|
|
| 100,000 |
- |
Hub Power Co. Ltd. |
|
32.85 |
3,284,700 |
40.80 |
4,080,000 |
- |
- |
- |
- |
|
| 229,159 |
229,159 |
Karachi Electric Supply
Corporation |
|
9.16 |
2,100,223 |
12.25 |
2,807,198 |
9.16 |
2,100,223 |
36.50 |
8,364,304 |
|
| 48,000 |
48,000 |
National Refinery Ltd. |
|
11.69 |
560,920 |
28.50 |
1,368,000 |
11.69 |
560,920 |
41.00 |
1,968,000 |
|
| 41,516 |
47,320 |
Pakistan State Oil Co.
Ltd. |
|
10.81 |
448,839 |
325.50 |
13,513,458 |
14.05 |
665,039 |
413.00 |
19,543,160 |
|
| - |
23,077 |
Shell Pakistan Ltd.-
Right |
|
- |
- |
- |
- |
90.00 |
2,076,930 |
158.00 |
3,646,166 |
|
| 69,231 |
46,154 |
Shell Pakistan Ltd. |
|
46.69 |
3,232,222 |
238.00 |
16,476,978 |
25.03 |
1,155,293 |
163.00 |
7,523,102 |
|
| 416,132 |
361,854 |
Sui Southern Gas Co. Ltd. |
|
5.59 |
2,325,780 |
28.25 |
11,755,729 |
6.43 |
2,325,780 |
32.25 |
11,669,791 |
|
|
|
|
|
|
|
|
AUTO & ENGINEERING |
|
|
| 50,000 |
- |
Pak Suzuki Motors Co Ltd. |
|
43.28 |
2,164,000 |
50.00 |
2,500,000 |
- |
- |
- |
- |
|
|
|
|
|
CABLES & ELECTRICAL |
|
|
| 22,000 |
- |
Philips Electrical Ind.
of Pakistan Ltd. |
78.46 |
1,726,100 |
57.50 |
1,265,000 |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
TRANSPORT |
|
|
| 100,000 |
- |
P.T.C.L. "A" |
|
33.16 |
3,315,500 |
30.50 |
3,050,000 |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
CHEMICAL & PHARMA |
|
|
| 10,000 |
- |
BOC Pak Ltd. |
|
149.01 |
1,490,100 |
139.00 |
1,390,000 |
- |
- |
- |
- |
|
| 31,250 |
- |
Engro Chemical (Pak) Ltd. |
|
113.77 |
3,555,400 |
142.00 |
4,437,500 |
- |
- |
- |
- |
|
| 50,000 |
- |
F.F.C. Jordan Fertilizer
Ltd. |
|
13.43 |
671,500 |
15.40 |
770,000 |
- |
- |
- |
- |
|
| 100,000 |
100,000 |
Fauji Fertilizer Co. Ltd. |
|
63.88 |
6,388,000 |
78.75 |
7,875.00 |
63.88 |
6,388,000 |
89.75 |
8,975,000 |
|
| 101,620 |
61,793 |
ICI Pakistan Ltd |
|
10.04 |
1,020,280 |
24.20 |
2,459,204 |
15.07 |
931,280 |
53.00 |
3,275,029 |
|
|
|
|
|
|
|
|
|
|
PAPER & BOARD |
|
|
| 200,000 |
209,399 |
Packages Ltd |
|
18.99 |
3,797,839 |
62.00 |
12,400,000 |
21.27 |
4,453,587 |
90.00 |
18,845,910 |
|
|
|
|
|
|
|
|
|
FOOD & ALLIED |
|
|
| 5.00 |
- |
Lever Brothers (Pak) Ltd. |
|
635.01 |
3,175,050 |
780.00 |
3,900,000 |
- |
- |
- |
- |
|
|
---------- |
|
---------- |
|
---------- |
|
---------- |
|
|
49,582,285 |
|
100,890,456 |
|
27,420,884 |
|
91,618,729 |
|
|
|
========== |
|
========== |
|
========== |
|
========== |
|
|
|
|
|
|
| *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 in August 1996 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. |
|
|
|
|
Rupees |
|
|
| Management
fee on initial |
|
100,000 |
|
| paid-up
capital @ 1/2% on Rs. 20,000,000 |
|
|
|
|
| Management
fee on capital raised through right issue |
|
| @
3% of net assets market value of the fund for nine month |
|
|
|
|
|
|
|
| 106,144,759 |
x |
30,000,000 |
x 9 x |
@ 3%
= |
|
|
|
|
|
|
50,000,000 |
12 |
|
1,432,954 |
|
|
---------- |
|
|
|
1,532,954 |
|
|
========== |
|
| 4.1
Net assets market value |
|
|
---------- |
|
| Investment
in quoted shares |
|
100,890,456 |
|
|
|
|
========== |
|
|
| Current
assets |
|
|
| Dividend
receivable |
|
|
|
60,000 |
|
| Prepaid
expense |
|
|
|
7,500 |
|
| Current
account with ICP |
|
|
12,664,531 |
|
|
|
|
---------- |
|
|
|
|
|
12,732,031 |
|
|
|
|
|
---------- |
|
|
|
|
|
113,622,487 |
|
|
|
|
|
========== |
|
| Current
liabilities |
|
|
|
|
|
| Accrued
expenses |
|
|
|
(55,213) |
|
| Unclaimed
dividend |
|
|
|
(7,026,560) |
|
| Taxation-net |
|
|
|
(395,955) |
|
|
|
|
---------- |
|
|
|
|
|
(7,477,728) |
|
|
|
|
|
---------- |
|
|
|
|
|
106,144,759 |
|
|
|
|
========== |
|
| 5.
AUDITORS' REMUNERATION |
|
|
|
|
|
Taseer Hadi |
Ford Rhodes |
1997 |
1996 |
|
|
Khalid & Co. |
Robson Morrow |
Rupees |
Rupees |
|
|
|
|
| Audit Fee |
|
2,195 |
2,195 |
4,390 |
4,180 |
|
| Tax
services |
|
5,175 |
- |
5,175 |
5,034 |
|
|
|
---------- |
---------- |
---------- |
---------- |
|
|
7,370 |
2,195 |
9,565 |
9,214 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
| 6.
EXPENSES INCURRED IN RESPECT OF ISSUE OF RIGHT CERTIFICATES |
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| Commission |
|
|
|
|
|
| -Banks |
|
|
|
|
114,874 |
- |
|
| ICP
- take up |
|
|
|
162,066 |
- |
|
| -
underwriting |
|
|
|
150,000 |
- |
|
| Consultancy
services |
|
|
|
94.12 |
32,157 |
|
| Advertising |
|
|
|
|
86,543 |
13,200 |
|
| Postage |
|
|
|
|
29,574 |
8,346 |
|
| Stamp duty |
|
|
|
|
75,000 |
- |
|
| Stock
exchange listing fee |
|
|
- |
102,857 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
712,174 |
156,560 |
|
|
|
|
|
========== |
========== |
|
| 7.
OTHER EXPENSES |
|
|
| Printing
and stationery |
|
|
|
58,839 |
40,576 |
|
| Advertising
and publicity |
|
|
17,099 |
10,730 |
|
| Professional
charges |
|
|
|
17,517 |
4,013 |
|
| Stock
Exchange Listing fee |
|
|
37,500 |
17,500 |
|
| Excise duty |
|
|
|
15,800 |
18,000 |
|
| Computer
related expenses |
|
|
152,900 |
61,155 |
|
| Postage |
|
|
|
27,033 |
41,513 |
|
| Professional
tax |
|
|
|
15,000 |
15,000 |
|
| Share
transfer stamps |
|
|
|
20,730 |
- |
|
| Miscellaneous |
|
|
|
1,535 |
1,058 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
363,953 |
209,545 |
|
|
|
|
========== |
========== |
|
| 8. TAXATION |
|
| The
income-tax assessment of the Fund has been finalised upto and including
assessment year 1996-97. However, the Fund |
|
| has
filed appeals before the Commissioner of income-tax (Appeal) relating to
assessment years 1993-94, 1994-95, 1995-96 |
|
| and
1996-97. In case of any adverse decision in respect of appeal for the above
referred assessment years, no material tax |
|
| liability
is expected to arise. |
|
|
| 9.
CASH GENERATED FROM OPERATIONS |
|
Note |
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Profit
before taxation |
|
|
9,403,906 |
10,792,401 |
|
|
|
|
========== |
========== |
|
|
| Adjustment
for non cash charges and other items: |
|
| Profit
on sale of Investment |
|
|
(8,343,077) |
