| Sixth ICP Mutual Fund |
|
|
|
|
|
|
|
|
|
|
|
| 25th
Annual Report 1998 |
|
|
| INVESTMENT
CORPORATION OF PAKISTAN |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1998 |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| NET ASSETS |
|
|
|
|
|
|
| Investment
in quoted shares [Market value |
|
| Rs.
63,020,078 (1997: 149,804,665)] |
4 |
48,023,706 |
44,819,939 |
|
|
|
|
|
| Security
deposit |
|
|
100,000 |
- |
|
|
|
|
| Current
Assets |
|
|
|
| Dividend
receivable |
|
1,020,000 |
87,000 |
|
| Prepaid
expenses |
|
20,000 |
7,500 |
|
| Current
account with Investment Corporation |
|
|
| of
Pakistan (ICP) |
|
|
21,216,170 |
22,555,628 |
|
| Taxation
- net |
|
|
183,234 |
67,155 |
|
|
|
|
|
---------- |
---------- |
|
|
|
22,439,404 |
22,717,283 |
|
| Current
Liabilities |
|
|
|
| Accrued
expenses |
|
|
56,641 |
46,367 |
|
| Unclaimed
dividend |
|
|
12,081,384 |
15,355,473 |
|
|
|
|
---------- |
---------- |
|
|
|
12,138,025 |
15,401,840 |
|
|
|
---------- |
---------- |
|
|
|
10,301,379 |
7,315,443 |
|
|
|
---------- |
---------- |
|
|
|
58,425,085 |
52,135,382 |
|
|
|
|
========== |
========== |
|
| FINANCED BY |
|
|
|
| Capital
and reserve |
|
|
|
|
|
|
| Capital |
|
|
|
|
| Authorised |
|
|
|
|
|
|
|
|
|
| 5,000,000
certificates of Rs. 10/- each |
|
50,000,000 |
50,000,000 |
|
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
| 5,000,000
certificates of Rs. 10/- each |
|
|
| fully
paid in cash |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
| Revenue
reserve |
|
|
|
| Unappropriated
income |
|
|
8,425,085 |
2,135,382 |
|
|
|
---------- |
---------- |
|
|
|
58,425,085 |
52,135,382 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
|
|
| ASADULLAH
KHAWAJA |
SYED MUZAFAR ALI SHAH |
SHAUKAT TAREEN |
|
| Managing
Director |
Director |
|
Director |
|
|
|
| INCOME
AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
|
|
|
| Dividend |
|
|
5,516,484 |
3,645,060 |
|
| Return
on current account with ICP |
|
1,708,965 |
1,510,034 |
|
| Profit
on sale of investment |
|
11,341,601 |
17,248,755 |
|
| Other
income |
|
|
9,541 |
- |
|
|
|
---------- |
---------- |
|
|
|
18,576,591 |
22,403,849 |
|
|
|
|
|
| EXPENSES |
|
|
|
|
|
|
| Management
fee |
|
5 |
1,856,675 |
2,930,919 |
|
| Auditors'
remuneration |
|
6 |
12,130 |
9,565 |
|
| Diminution
in the value of investment |
|
- |
366,500 |
|
| Expenses
incurred in respect of issue of right |
|
| certificates |
|
7 |
- |
796,108 |
|
| Other
expenses |
|
8 |
298,770 |
308,047 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
2,167,575 |
4,411,139 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
16,409,016 |
17,992,710 |
|
|
|
|
|
|
|
| Reversal
of excess provision for Golden Handshake |
|
| expenses
(net) |
|
3 |
3,165,687 |
- |
|
|
|
|
---------- |
---------- |
|
| Income
before taxation |
|
|
19,574,703 |
17,992,710 |
|
|
|
|
|
|
| Taxation
- Current year |
|
9 |
785,000 |
- |
|
|
|
|
---------- |
---------- |
|
| Income
after taxation |
|
|
18,789,703 |
17,992,710 |
|
| Unappropriated
income brought forward |
|
2,135,382 |
642,672 |
|
|
|
|
---------- |
---------- |
|
| Available
for appropriation |
|
|
20,925,085 |
18,635,382 |
|
| Interim
dividend @ 25% (1997:33%) |
|
|
12,500,000 |
16,500,000 |
|
|
|
|
---------- |
---------- |
|
| Unappropriated
income carried forward |
|
8,425,085 |
2,135,382 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
for the Investment Corporation of Pakistan |
|
|
| ASADULLAH
KHAWAJA |
SYED MUZAFAR ALI SHAH |
SHAUKAT TAREEN |
|
| Managing
Director |
Director |
|
Director |
|
|
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operations |
|
10 |
5,588,911 |
(452,725) |
|
| Sale
of investment |
|
|
15,919,100 |
18,571,479 |
|
| Purchase
of investment |
|
|
(7,781,266) |
(30,794,909) |
|
| Taxes paid |
|
|
(901,079) |
- |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from operating activities |
12,825,666 |
(12,676,155) |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Security
deposit |
|
(100,000) |
- |
|
| Return
on current account with ICP |
|
1,708,965 |
1,510,034 |
|
|
|
---------- |
---------- |
|
| Net
cash inflow from investing activities |
|
1,608,965 |
1,510,034 |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
| Issue
of right certificates |
|
|
- |
40,000,000 |
|
| Dividend
paid |
|
|
(15,774,089) |
(9,977,844) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from financing activities |
(15,774,089) |
30,022,156 |
|
|
|
|
---------- |
---------- |
|
| NET
(DECREASE)/INCREASE IN CASH EQUIVALENT |
|
(1,339,458) |
18,856,035 |
|
| CASH
EQUIVALENT AT THE BEGINNING OF THE YEAR |
|
22,555,628 |
3,699,593 |
|
|
|
|
|
---------- |
---------- |
|
| CASH
EQUIVALENT AT THE END OF THE YEAR |
11 |
21,216,170 |
22,555,628 |
|
|
|
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| In
order generally to broaden the base of investment and to encourage investment
in sound quoted shares, the Sixth 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)
Investment is valued at average cost where the cost is lower than the market
value; |
|
|
|
|
| (ii)
in cases 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. |
|
|
| 2.3
Revenue recognition |
|
| 6(i)
Dividend income is recorded at the time of closure of share transfer books
or' 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. |
|
|
| 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. |
|
|
| 3.
BASIS OF ACCOUNTING FOR DISPOSAL |
|
| OF
SHARES OF PRIVATISED COMPANIES |
|
|
| In
previous years shares of Kakakhel Industries Limited (KIL), Wazir All
Industries Limited (WALL) and Ghabriwal Cement Industries |
|
| Limited
(GCIL) were acquired by the Privatisation Commission (the Commission) from
the Fund through Investment Corporation of |
|
| Pakistan
(ICP) for onward transmission to the bidders under the Privatisation Scheme
of the Government of Pakistan. |
|
|
| According
to agreements reached with the bidders, the price payable was subject to
adjustment for the difference between figures as per |
|
| audited
accounts at specified dates and unaudited balance sheets used for the bidding
purposes and Commission's share of costs of "golden |
|
| handshake"
payable to employees of the privatised units. ICP was also advised that
proportionate share of Commission's expenses will be |
|
| deducted
from the final disbursements. However, to date no amounts has been deducted
on account or' share of Commission's expenses. |
|
|
| To
cover the above uncertainties ICP has had to make certain provisions on adhoc
basis. In order to ensure liquidity of the Fund for sub- |
|
| sequent
payment of dividend ICP acquired the Fund's holding at offered price less
price adjustments and proportionate cost of "golden |
|
| handshaken
so far incurred and provision for further costs. |
|
|
| During
the year, ICP made an additional provision for expenses notified by the
Commission in respect of KIL. |
|
|
| Subsequent
to the year end, ICP has been advised that there are no further amounts due
from ICP on account of golden handshake and |
|
| privatization
expenses. Accordingly, ICP has decided to reverse the balance of excess
provision held in their books. |
|
|
| Name
of Company |
|
Amount |
Provided |
Total |
Amount |
Amount |
|
|
|
originally |
during the |
provision |
notified by |
excess |
|
|
|
provided |
year |
|
the |
provision |
|
|
|
|
Commission |
reversed |
|
|
|
|
| Kakakhel
Industries Limited |
632,352 |
636,091 |
1,268,443 |
1,268,443 |
- |
|
| Wazir
Ali Industries Limited |
151,879 |
- |
151,879 |
101,264 |
50,615 |
|
| Gharibwal
Cement Industries |
|
|
|
|
|
| Limited |
|
|
4,300,320 |
- |
4,300,320 |
549,157 |
3,751,163 |
|
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
Rupees |
5,084,551 |
636,091 |
5,720,642 |
1,918,864 |
3,801,778 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 4.
INVESTMENT IN QUOTED SHARES |
|
| Unless
stated otherwise, the holdings are in the Ordinary shares of Rs. 10/- each |
|
|
| 1998 |
1997 |
|
|
1998 |
|
1997 |
|
| *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 |
|
| 108,000 |
1,000,130 |
First Grindlays Modaraba |
10.44 |
1,128,000 |
10.75 |
1,161,000 |
11.26 |
1,128,000 |
11.50 |
1,150,000 |
|
|
|
|
|
INVESTMENT BANKS |
|
|
| 120,750 |
115,000 |
Askari Commercial Bank
Ltd. |
18.64 |
2,251,000 |
13.75 |
1,660,313 |
19.57 |
2,251,000 |
28.50 |
3,277,500 |
|
| 24,667 |
21,450 |
Bank Al-Habib Ltd. |
|
21.90 |
540,150 |
23.00 |
567,341 |
25.18 |
540,150 |
28.50 |
611,325 |
|
|
|
|
|
SUGAR AND ALLIED |
|
|
| 337,500 |
300,000 |
Habib Sugar Mills Ltd.
(Rs. 5) |
5.14 |
1,736,041 |
7.50 |
2,531,250 |
5.79 |
1,736,041 |
11.50 |
3,450,000 |
|
| 85,998 |
85,998 |
Mirpurkhas Sugar Mills
Ltd. |
11.27 |
969,480 |
12.25 |
1,053,476 |
11.27 |
969,480 |
16.50 |
1,418,967 |
|
|
|
|
|
CEMENT |
|
|
|
| 50,000 |
50,000 |
Cherat Cement Company
Ltd. |
19.34 |
967,160 |
10.20 |
510,000 |
19.34 |
967,160 |
20.75 |
1,037,500 |
|
| 15,000 |
15,000 |
Dadabhoy Cement
Industries |
8.00 |
120,000 |
3.50 |
52,500 |
8.00 |
120,000 |
8.00 |
120,000 |
|
|
Limited. |
|
|
| 36,527 |
36,527 |
Gharibwal Cement
Industries |
2.85 |
104,183 |
5.00 |
182,635 |
2.85 |
104,183 |
23.20 |
847,426 |
|
|
Limited. |
|
|
|
|
|
|
|
FUEL AND ENERGY |
|
|
|
| 50,000 |
100,000 |
Hub Power Company
Limited. |
32.41 |
1,620,250 |
12.37 |
618,500 |
32.41 |
3,240,500 |
40.80 |
4,080,000 |
|
| 159,468 |
209,468 |
Karachi Electric Supply |
4.54 |
723,208 |
8.42 |
1,342,720 |
4.53 |
949,708 |
12.25 |
2,565,983 |
|
|
Corporation Limited. |
|
|
| 71,662 |
71,662 |
National Refinery
Limited. |
11.16 |
799,461 |
15.50 |
1,110,761 |
11.16 |
799,461 |
28.50 |
2,042,367 |
|
| 305,500 |
270,000 |
Pakistan State Oil
Company |
3.28 |
1,001,828 |
73.75 |
22,530,625 |
3.94 |
1,062,508 |
325.50 |
87,885,000 |
|
|
Limited. |
|
|
| - |
6,900 |
Shell Pakistan Limited. |
|
150.01 |
1,035,069 |
238.00 |
1,642,200 |
|
| 3,450 |
- |
Shell Pakistan Limited.
(Right) |
130.00 |
448,500 |
202.00 |
696,900 |
- |
- |
- |
- |
|
| 159,017 |
138,276 |
Sui Northern Gas
Pipelines |
14.31 |
2,275,500 |
8.85 |
1,407,300 |
16.46 |
2,275,500 |
31.75 |
4,390,263 |
|
|
Company Limited, |
|
|
| 39,675 |
- |
Sui Southern Gas Company
Ltd. |
23.00 |
912,525 |
9.00 |
357,075 |
- |
- |
- |
- |
|
|
|
|
AUTO AND ENGINEERING |
|
| 17,000 |
17,000 |
Pak Suzuki Motor Company Ltd, |
41.82 |
711,000 |
34.00 |
578,000 |
41.82 |
711,000 |
50.00 |
850,000 |
|
|
|
|
|
|
TRANSPORT AND
COMMUNICATION |
|
|
| 100,000 |
100,000 |
Pakistan Telecommunications |
32.61 |
3,261,000 |
15.77 |
1,577,000 |
32.61 |
3,261,000 |
30.50 |
3,050,000 |
|
|
Company Limited
"A". |
|
|
|
|
|
|
|
|
|
CHEMICAL AND
PHARMACEUTICAL |
|
|
|
|
| 10,000 |
10,000 |
BOC (Pakistan) Limited. |
149.01 |
1,490,100 |
90.00 |
900,000 |
149.01 |
1,490,100 |
139.00 |
1,390,000 |
|
| 12,000 |
6,000 |
Dawood Hercules Chemicals |
69.50 |
834,000 |
120.00 |
1,440,000 |
139.00 |
834,000 |
140.50 |
843,000 |
|
|
Limited. (Rs.5) |
|
|
| 35,937 |
31,250 |
Engro Chemicals (Pakistan) Ltd. |
99.11 |
3,561,600 |
51.25 |
1,841,771 |
113.97 |
3,561,600 |
142.00 |
4,437,500 |
|
| 150,000 |
100,000 |
Fauji Fertilizer Company
Ltd. |
80.46 |
12,069,740 |
51.37 |
7,705,500 |
76.26 |
7,625,500 |
78.75 |
7,875,000 |
|
| 200,000 |
100,000 |
FFC Jordan Fertilizer
Company |
16.44 |
3,287,500 |
12.97 |
2,594,000 |
13.12 |
1,311,500 |
15.40 |
1,540,000 |
|
|
Limited. |
|
|
|
|
|
|
PAPER AND BOARD |
|
|
| 7,000 |
7,000 |
Cherat Papersack Limited. |
23.32 |
163,230 |
28.00 |
196,000 |
23.32 |
163,230 |
31.40 |
219,800 |
|
| 28,132 |
113,887 |
Packages Limited. |
|
16.34 |
459,747 |
35.99 |
1,012,392 |
18.39 |
2,094,747 |
62.00 |
7,060,994 |
|
|
|
VANASPATI AND ALLIED
INDUSTRIES |
|
| 16,345 |
16,345 |
Wazir Ali Industries
Limited |
14.59 |
238,403 |
8.75 |
143,019 |
14.59 |
238,402 |
13.45 |
219,840 |
|
|
|
|
|
|
FOOD AND ALLIED |
|
|
| 10,000 |
100,130 |
Lever Brothers(Pakistan) |
635.01 |
6,350,100 |
925.00 |
9,250,000 |
635.01 |
6,350,100 |
780.00 |
7,800,000 |
|
|
|
Limited. (Rs.50) |
|
|
|
|
---------- |
|
---------- |
|
---------- |
|
---------- |
|
|
|
48,023,706 |
|
63,020,078 |
|
44,819,939 |
|
149,804,665 |
|
|
========== |
|
========== |
|
========== |
|
========== |
|
|
| *
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. |
|
|
|
| 5.
MANAGEMENT FEE |
|
| The
management fee is payable to Investment Corporation of Pakistan @ ~A % per
annum on initial paid-up capital of the Fund. The man- |
|
| agement
fee is respect of the additional capital raised by way of right issue is
payable @ 3 % per annum of the net assets market value of the |
|
| Fund
to be determined at the close of the financial year. |
|
|
|
Note |
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Management
fee on initial paid-up capital @1/2% |
|
| on
Rs. 10 million |
|
50,000 |
50,000 |
|
|
|
|
| Management
fee on capital raised through right issue |
|
| @
3 % of net assets market value of the Fund |
|
|
| 75,278,132
x 40,000,000x 3% |
|
|
| 50,000,000 |
|
|
1,806,675 |
2,880,919 |
|
|
|
|
---------- |
---------- |
|
|
|
1,856,675 |
2,930,919 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 5.1
Net assets market value |
|
|
|
|
|
| Investment
in quoted shares |
|
63,020,078 |
149,804,665 |
|
| Security
deposit |
|
|
100,000 |
- |
|
| Current
assets |
|
|
|
| Dividend
receivable |
|
|
1,020,000 |
87,000 |
|
| Prepaid
expenses |
|
|
20,000 |
7,500 |
|
| Current
account with ICP |
|
23,072,845 |
25,486,547 |
|
| Taxation
- net |
|
|
183,234 |
67,155 |
|
|
|
|
---------- |
---------- |
|
|
|
24,296,079 |
25,648,202 |
|
|
|
---------- |
---------- |
|
|
|
87,416,157 |
175,452,867 |
|
| Current
liabilities |
|
|
|
| Accrued
expenses |
|
56,641 |
46,367 |
|
| Unclaimed
dividend |
|
12,081,384 |
15,355,473 |
|
|
|
---------- |
---------- |
|
|
|
12,138,025 |
15,401,840 |
|
|
|
---------- |
---------- |
|
|
|
75,278,132 |
160,051,027 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| 6.
AUDITORS' REMUNERATION |
|
|
|
|
|
|
Taseer Hadi |
Ford Rhodes |
1998 |
1997 |
|
|
Khalid |
Robson |
Rupees |
Rupees |
|
|
|
& Co. |
Morrow |
|
| Audit fee |
|
2,565 |
2,565 |
5,130 |
4.39 |
|
| Tax
services |
|
7,000 |
- |
7,000 |
5,175 |
|
|
|
---------- |
---------- |
---------- |
---------- |
|
|
|
9,565 |
2,565 |
12,130 |
9,565 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| 7.
EXPENSES INCURRED IN RESPECT OF ISSUE OF RIGHT CERTIFICATES |
|
|
| Commission |
|
| Bank |
|
|
- |
194,793 |
|
| ICP
- takeup |
|
|
- |
72,322 |
|
| -
underwriting |
|
|
- |
200,000 |
|
| Consultancy
services |
|
|
- |
113,725 |
|
| Advertising |
|
|
- |
81,924 |
|
| Postage |
|
|
- |
22,827 |
|
| Stamp duty |
|
|
- |
100,000 |
|
| Printing
charges |
|
|
- |
10,517 |
|
|
|
---------- |
---------- |
|
|
|
|
- |
796,108 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 8.
OTHER EXPENSES |
|
|
|
|
|
|
|
|
| Printing
and stationery |
|
|
48,446 |
38,262 |
|
| Advertising
and publicity |
|
|
17,276 |
18,946 |
|
| Professional
charges |
|
|
|
12,817 |
17,517 |
|
| Listing
fee - Stock exchange |
|
|
46,250 |
35,000 |
|
|
- Central Depository
Company |
|
12,500 |
- |
|
| Excise duty |
|
|
|
|
4,600 |
9,800 |
|
| Computer
related expenses |
|
|
56,653 |
127,900 |
|
| Postage |
|
|
|
|
42,186 |
23,071 |
|
| Professional
tax |
|
|
|
38,000 |
15,000 |
|
| Bank
charges |
|
|
|
11,358 |
- |
|
| Share
transfer stamps |
|
|
|
7,325 |
21,066 |
|
| Miscellaneous |
|
|
|
1,359 |
1,491 |
|
|
|
---------- |
---------- |
|
|
|
298,770 |
308,047 |
|
|
|
