| Seventh ICP Mutual Fund |
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| 25th
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 25th 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: |
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|
|
|
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|
(Rs. '000') |
|
|
| Net
Income before Taxation |
|
|
99 |
|
| Taxation |
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|
(359) |
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|
|
|
------------------ |
|
| Net
(Loss) after Taxation |
|
|
(260) |
|
| Un-appropriated
income B/F |
|
|
3,246 |
|
|
|
|
------------------ |
|
| Available
for Appropriation |
|
|
2,986 |
|
| Cash Dividend |
|
|
-- |
|
| Un-appropriated
Income carried forward to |
|
|
|
| Revenue
Reserve |
|
|
2,986 |
|
|
|
|
| Basic
(Loss) per certificate (in rupees) |
|
(0.05) |
|
|
|
|
| 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 went 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 Seventh Mutual Fund carried total income of Rs.6.99
million including Rs.4.02 million |
|
| dividend
income. The main reason for the loss was Rs.4.92 million on account of
diminution in the value of certain |
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| investments.
NAV's worked out Rs. 13.96 per certificate as compared to Rs.9.75 last year. |
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| Future
Prospects |
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|
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| The
stock market situation is likely to improve due to Government's steady
measures to strengthen capital market. Such measures |
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| 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 |
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| investment
portfolio. |
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|
|
|
| Pattern
of Certificate Holdings |
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|
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| The
pattern of certificate holding is annexed herewith. |
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|
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| Auditors |
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|
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| Our
present auditors M/s. Taseer, Hadi, Khalid & Company and M/s. Ford,
Rhodes, Robson, Morrow retire and being eligible |
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| offer
themselves for re-appointment. |
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|
|
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| Acknowledgement |
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| In
the end we wish to express our thanks to all our certificate holders, bankers
and other financial institutions for their continued |
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| support. |
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|
for the Investment Corporation of Pakistan |
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|
|
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 |
|
| Investments
in quoted shares |
|
3 |
44,342,327 |
47,179,817 |
|
| [Market
value Rs 6 ,240,946 (1999: Rs.42,760,868)] |
|
|
| Long
term deposit |
|
100,000 |
100,000 |
|
|
| Current assets |
|
| Dividend
receivable |
|
944,640 |
640,920 |
|
| Prepaid
expenses |
|
|
-- |
7,500 |
|
|
| Current
account with the Investment Corporation |
|
| of
Pakistan (ICP) |
|
7,948,606 |
10,778,328 |
|
| Cash at bank |
|
|
224,980 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
9,118,226 |
11,426,748 |
|
| Current
liabilities |
|
| Accrued
expanses |
|
|
13,400 |
19,338 |
|
| Dividend
payable |
|
|
-- |
5,000,000 |
|
| Provision
for taxation - net |
|
|
92,032 |
4,486 |
|
| Unclaimed
dividend |
|
|
468.54 |
436,610 |
|
|
|
|
------------------ |
------------------ |
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|
|
|
573,975 |
5,460,434 |
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|
|
|
------------------ |
------------------ |
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|
|
|
8,544,251 |
5,966,314 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
52,986,578 |
53,246,131 |
|
|
|
|
========== |
========== |
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|
|
|
| FINANCED BY |
|
| Capital
and Reserves |
|
|
|
| Capital |
|
|
|
| Authorised |
|
| 5,000,000
(1999: 5,000,000) |
|
Rupees |
50,000,000 |
50,000,000 |
|
| Certificates
of Rs. 10/- each |
|
========== |
========== |
|
|
| Issued,
subscribed and paid-up |
|
|
| 5,000,000
(1999: 5,000,000) |
|
50,000,000 |
50,000,000 |
|
| Certificates
of Rs. 10/- each fully paid in cash |
|
|
| Revenue
reserve |
|
| Unappropriated
income |
|
|
2,986,578 |
3,246,131 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
52,986,578 |
53,246,131 |
|
|
|
|
========== |
========== |
|
|
|
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| 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 |
|
4,018,763 |
3,061,237 |
|
| Return
on current account with the ICP |
|
1,101,705 |
857,366 |
|
| Profit
on sale of investments |
|
1,875,380 |
768,990 |
|
| Miscellaneous |
|
|
-- |
1,551 |
|
|
|
------------------ |
------------------ |
|
|
|
6,995,848 |
4,689,144 |
|
|
|
|
|
| EXPENDITURE |
|
| Management
fee |
|
4 |
1,727,245 |
1,341,852 |
|
| Auditors'
remuneration |
|
5 |
22,751 |
19,590 |
|
| Diminution
in the value of investments |
|
4,916,500 |
864,750 |
|
| Other expenses |
|
6 |
230,308 |
199,161 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,896,804 |
2,425,353 |
|
|
------------------ |
------------------ |
|
| NET
INCOME BEFORE TAXATION |
|
99,044 |
2,263,791 |
|
|
|
|
| TAXATION
- Current |
|
7 |
358,597 |
-- |
|
| - Prior |
|
-- |
(51,204) |
|
|
|
------------------ |
------------------ |
|
|
|
358,597 |
(51,204) |
|
|
|
------------------ |
------------------ |
|
| NET
(LOSS)/INCOME FOR THE YEAR |
|
(259,553) |
2,314,995 |
|
|
| UNAPPROPRIATED
INCOME BROUGHT FORWARD |
3,246,131 |
5,931,136 |
|
|
|
------------------ |
------------------ |
|
| AVAILABLE
FOR APPROPRIATION |
|
2,986,578 |
8,246,131 |
|
|
| Final
dividend-(1999: @ 10%) |
|
-- |
5,000,000 |
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
INCOME CARRIED FORWARD |
Rupees |
2,986,578 |
3,246,131 |
|
| TO
REVENUE RESERVE |
|
========== |
========== |
|
|
|
|
|
|
| TO
REVENUE RESERVE |
|
|
|
| BASIC
(Loss) / EARNINGS PER CERTIFICATE |
8 |
(0.05) |
0.46 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| 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 |
|
|
|
| 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 |
1,736,301 |
1,804,987 |
|
| Sale
of investments |
|
|
4,599,850 |
2,296,720 |
|
| Purchase
of investments |
|
|
(4,803,480) |
(129,600) |
|
| Taxes paid |
|
|
|
(271,051) |
(204,596) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
1,261,620 |
3,767,511 |
|
|
========== |
========== |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Return
on current account with the ICP |
|
1,101,705 |
857,366 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
1,101,705 |
857,366 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Dividend paid |
|
|
(4,968,067) |
(1,754,554) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash out flow from financing activities |
|
(4,968,067) |
(1,754,554) |
|
|
| NET
(DECREASE) / INCREASE IN CASH & CASH EQUIVALENTS |
(2,604,742) |
2,870,323 |
|
| CASH
EQUIVALENTS AT THE BEGINNING OF THE YEAR |
10,778,328 |
7,908,005 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
& CASH EQUIVALENTS AT THE END OF THE YEAR |
10 |
8,173,586 |
10,778,328 |
|
|
|
|
========== |
========== |
|
|
|
|
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 |
|
|
|
Capital |
Revenue Reserve |
|
|
|
Issued, |
Unappropriated |
Total |
|
|
Subscribed & |
Income |
|
|
|
paid up |
|
|
|
Rupees |
Rupees |
Rupees |
|
|
| Balance
as at 30 June 1998 |
|
50,000,000 |
5,931,136 |
55,931,136 |
|
| Net
Income for the year |
|
-- |
2,314,995 |
2,314,995 |
|
| Dividend |
|
|
-- |
(5,000,000) |
(5,000,000) |
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1999 |
|
50,000,000 |
3,246,131 |
53,246,131 |
|
| Net
loss for the year |
|
-- |
(259,553) |
(259,553) |
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
|
50,000,000 |
2,986,578 |
52,986,578 |
|
|
========== |
========== |
========== |
|
|
|
|
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 of investment and to encourage investment in shares
of companies quoted on the stock |
|
| exchanges
in the country, the Seventh ICP Mutual Fund was established by the Investment
Corporation of Pakistan |
|
| (ICP),
acting as its Trustee, on May 15, 1975, under the ICP Ordinance, 1966. The
Fund is listed on all three stock |
|
| exchanges
in Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention without
taking any effect of inflation. |
|
|
| 2.2 Investments |
|
|
| i)
Investment are 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 recognise other than |
|
| temporary
decline i.e. for a period not less than three years, in order to arrive at
their revised book values; and |
|
|
| 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 current rates for taxation after
taking into account tax |
|
| credits
available, if any. |
|
|
| 2.4
Revenue recognition |
|
| i)
Dividend income is accounted for at the closure of share transfer books of
the company declaring dividend; |
|
|
| ii)
Return on current account with ICP is accounted for on the basis 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 |
|
MODARABAS |
|
|
| 15,660 |
15,660 |
First Grindlays Modaraba |
9.84 |
154,135 |
14.58 |
228,323 |
9.84 |
154,135 |
12.25 |
191,835 |
|
|
|
|
INVESTMENT BANKS |
|
| 50,000 |
50,000 |
Faysal Bank Ltd. |
25.58 |
1,278,875 |
9.23 |
461,500 |
25.58 |
1,278,875 |
9.35 |
467,500 |
|
|
|
|
TEXTILE AND SPINNING |
|
| 16,750 |
26,750 |
Khalid Siraj Textile
Mills Ltd. |
3.25 |
54,438 |
6.00 |
100,500 |
3.25 |
86,938 |
3.25 |
86,938 |
| 100,500 |
-- |
Ibrahim Fibres |
|
14.56 |
1,463,280 |
14.45 |
1,452,225 |
-- |
-- |
-- |
-- |
|
|
|
|
|
|
|
|
|
|
|
CEMENT |
|
|
| 108,960 |
133,960 |
Cherat Cement Company
Ltd. |
16.57 |
1,804,930 |
21.48 |
2,340,461 |
16.56 |
2,219,000 |
13.00 |
1,741,480 |
| 50,000 |
50,000 |
Lucky Cement Company Ltd. |
3.82 |
191,000 |
9.05 |
452,500 |
3.82 |
191,000 |
3.82 |
191,000 |
|
|
|
|
FUEL AND ENERGY |
|
| 50,000 |
55,000 |
National Refinery Ltd. |
12.32 |
615,822 |
42.45 |
2,122,500 |
12.32 |
677,421 |
30.37 |
1,670,350 |
| 56,864 |
30,720 |
Pakistan State Oil
Company Ltd. |
173.23 |
9,850,500 |
163.10 |
9,274,518 |
211.92 |
6,510,300 |
92.75 |
2,849,280 |
| 40,000 |
45,000 |
Shell Pakistan Ltd. |
129.46 |
5,178,200 |
267.63 |
10,705,200 |
129.46 |
5,825,500 |
163.00 |
7,335,000 |
| 100,000 |
100,000 |
S. Electric Power Company
Ltd. |
16.50 |
1,650,000 |
8.10 |
810,000 |
16.50 |
1,650,000 |
6.32 |
632,000 |
|
|
|
|
|
|
|
|
|
|
|
TRANSPORT AND
COMMUNICATION |
|
|
| 100,000 |
100,000 |
P.T.C.L. "A" |
|
33.69 |
3,369,000 |
27.08 |
2,708,000 |
33.69 |
3,369,000 |
20.02 |
2,002,000 |
|
|
|
|
|
|
|
CHEMICAL AND
PHARMACEUTICALS |
|
|
| 13,000 |
13,225 |
BOC Pakistan Ltd. |
124.59 |
1,619,700 |
114.00 |
1,482,000 |
122.47 |
1,619,700 |
81.00 |
1,071,225 |
| 7,440 |
7,440 |
Dawood Hercules Chemicals
Ltd. |
57.76 |
429,700 |
80.00 |
595,200 |
57.76 |
429,700 |
102.00 |
758,880 |
| 41,060 |
41,060 |
Engro Chemicals
(Pakistan) Ltd. |
81.53 |
3,347,700 |
59.33 |
2,436,090 |
81.53 |
3,347,700 |
73.67 |
3,024,890 |
| -- |
95,000 |
F.F.C. Jordan Fertilizer
Company Ltd. |
-- |
-- |
-- |
-- |
11.25 |
1,068,750 |
11.25 |
1,068,750 |
| 150,000 |
150,000 |
Fauji Fertilizer Company
Ltd. |
39.58 |
5,937,000 |
39.58 |
5,937,000 |
72.36 |
10,853,500 |
41.17 |
6,175,500 |
| 507,385 |
557,385 |
ICI Pakistan Ltd. |
|
10.01 |
5,076,397 |
15.13 |
7,676,735 |
10.01 |
5,576,647 |
9.00 |
5,016,465 |
|
|
|
|
|
|
|
PAPER AND BOARD |
|
|
|
| 206,775 |
206,775 |
Packages Ltd. |
|
11.23 |
2,321,650 |
60.25 |
12,458,194 |
11.23 |
2,321,651 |
41.00 |
8,477,775 |
|
|
|
|
|
------------------ |
|
------------------ |
|
------------------ |
|
------------------ |
|
|
|
Rupees |
44,342,327 |
|
61,240,946 |
|
47,179,817 |
|
42,760,868 |
|
|
|
|
========== |
|
========== |
|
========== |
|
========== |
| *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 (RI) is payable @ 3% per annum of the net assets |
|
| market
value of the Fund to be determined at the close of the financial. |
|
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
| Management
fee on initial paid-up capital @ 1/2% |
|
| of
Rs. 10.00 million |
|
50,000 |
50,000 |
|
|
|
|
|
|
| Management
fee on capital raised in prior years through RI |
|
| @ 3% of net assets
market value of the Fund, in |
|
| proportion
of capital raised through RI to total paid-up-capital, |
|
| after
charging management fee. |
|
4.1 |
1,677,245 |
1,291,852 |
|
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
1,727,245 |
1,341,852 |
|
|
========== |
========== |
|
| 4.1
Market value of net assets at the close of financial |
|
| year
after charging management fee |
|
|
| Investments
in quoted shares |
|
3 |
61,240,946 |
42,760,868 |
|
|
|
| Long
term deposit |
|
|
100,000 |
100,000 |
|
|
|
|
| Current assets |
|
|
|
| Dividend
receivable |
|
|
944,640 |
640,920 |
|
| Prepaid
expenses |
|
|
-- |
7,500 |
|
| Current
account with the ICP |
|
|
7,948,606 |
10,778,328 |
|
| Cash at bank |
|
|
224,980 |
-- |
|
|
|
------------------ |
------------------ |
|
|
9,118,226 |
11,426,748 |
|
|
|
------------------ |
------------------ |
|
|
|
70,459,172 |
54,287,616 |
|
|
|
|
| Current
Liabilities |
|
|
|
| Accrued
expenses |
|
13,400 |
19,338 |
|
| Provision
for taxation-net |
|
92,032 |
4,486 |
|
|
|
| Unclaimed
dividend |
|
|
468,543 |
436,610 |
|
|
------------------ |
------------------ |
|
|
573,975 |
460,434 |
|
|
|
|
------------------ |
------------------ |
|
|
69,885,197 |
53,827,182 |
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
| 2000:
(69,885,197) x 40,000,000 ) |
@ 3%
= |
1,677,245 |
|
|
|
| |
50,000,000 |
|
========== |
|
|
|
|
|
|
Ford, Rhodes, |
Taseer Hadi |
2000 |
1999 |
|
|
|
|
Robson, Morrow |
Khalid & Co. |
Rupees |
Rupees |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
|
|
|
| Audit fee |
|
2,950 |
2,950 |
5,900 |
5,900 |
|
|
|
| Out-of-pocket
expenses |
708 |
708 |
1,416 |
4,860 |
|
|
|
| Tax services |
|
-- |
15,435 |
15,435 |
8,830 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
3,658 |
19,093 |
22,751 |
19,590 |
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
| 6.
OTHER EXPENSES |
|
|
| Printing
and stationery |
|
11,789 |
5,980 |
|
|
|
| Advertising
and publicity |
|
2,373 |
3,185 |
|
|
|
| Professional
charges |
|
4,134 |
3,559 |
|
|
|
| Listing
fee - stock exchanges |
|
46,250 |
46,250 |
|
|
|
| - Central Depository
Company |
|
25,000 |
24,998 |
|
|
|
| Computer
related expenses |
|
76,098 |
44,520 |
|
|
|
| Postage |
|
|
19,118 |
14,716 |
|
|
|
