Open-Ended Mutual Funds: THE ALFALAH GHP VALUE FUND - Year Ended December 31, 2006 (Audited)
The Alfalah GHP Value Fund (AGV Fund) was established under a Trust Deed, executed between Alfalah GHP Investment Management Limited, as its Management Company and CDC Pakistan, as its Trustee and is authorised under the NBFC Rules- 2003.
The Trust Deed was executed on May 19, 2005 and was approved by SECP on May 13, 2005 in accordance with NBFCs Rules- 2003. AGV Fund is an open ended mutual fund and units are offered for public subscription on a continuous basis. The units are transferable and can be redeemed by surrendering them to AGV Fund at the option of the unit holders. The fund is listed on the Karachi Stock Exchange.
The pattern of unit holdings as on December 31, 2006 was fairy spread among different categories of unit-holders as shown below:
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Category & Unit Holdings Units held % of Total
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Bank Alfalah Limited: 2,019,704 17%
GHP Financial Services AG: 715,627 6%
Executives: 101 0%
Public Limited Companies: 1,191,538 10%
Banks and DFIs: 3,931,411 34%
Individuals: 977,307 8%
Retirement Funds: 1,482,620 13%
Other Corporate Sector: 357,487 3%
NGOs: 1,008,476 9%
TOTAL: 11,684,271 100%
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During the year ended December 31, 2006, the offer price per unit ranged between Rs 60.46 and Rs 52.92 as compared to Rs 52.74 and Rs 51.25 per unit during the previous year (Face value per unit being Rs 50).
During the period the repurchase price ranged between Rs 58.99 and Rs 51.63 as compared to Rs 51.45 and 50.00. According to the notes to the financial statements, units issued are recorded at the offer price, as determined by the Management Company, for the applications received by the distributors during business hours on that day. The offer price represents the net assets value of units as of the close of the business day plus the allowable sale load and any provision for duties and charges, if applicable.
The sales load is payable to the investment facilitators, distributors and the Management Company. Units redeemed are recorded at the redemption price, applicable on units for which the distributors receive redemption applications during business hours of that day. The redemption price represents the net assets value per units as of the close of the business day less any back-end load, any duties, taxes, charges on redemption, if applicable.
Total Assets of AGV Fund have on December 31, 2006 increased to Rs 681 million as compared to Rs 431 million as on December 31, 2005, an increase of 58%. The Unit Holders Fund however increased by 66% to Rs 688 million as on December 31, 2006 as compared to Rs 403 million as on December 31, 2005. The number of units in issue on December 31, 2006 was 11.684 million (2005: 7.856 million).
The increase in the Fund was possible due to issue of larger number of units as against redemption of units in the same period. Also, this year there was larger net income at Rs 93 million compared to Rs 6 million for the previous year (about two months period only from October 30 to December 31, 2005). AGV Fund ended the year with asset allocation: Equity 46.92%, CFS 12.47%, TFCs 3.54% and Cash & Short term Placements 37.07%.
Total Income of AGV Fund for year ended December 31, 2006 increased by 421% to Rs 85.612 million (2005: Rs 13.861 million). Major sources of revenue were capital gains amounting to Rs 52 million, mark up on bank deposits Rs 22 million, income from CFS transactions Rs 9 million and Dividend income Rs 7 million. After accounting for expenses of Rs 24 million, the net income from operating activities for the period stands at Rs 62 million. Element of gain included in prices of units sold less than in units repurchased amount to Rs 31 million, raising the total net income to Rs 93 million.
The expenses for the year under review (full 12 months period) are at Rs 24 million compared to Rs 7 million for the previous year (about 2 months operations from October 30 to December 31, 2005). The net income for 2006 from operating activities increased ten fold to Rs 62 million compared to Rs 6 million for the previous year (about two months period). Per unit earnings improved to Rs 7.94 from Rs 0.78 for the previous year (about two months period). Performance statistics are given below.
The Directors in their Report state that the Board has approved a bonus of Rs 5 per unit (10% on the face value of Rs 50 per unit). An investor holding 100 units as of December 31, 2006 will get 9.5785 units on the ex-Bonus Price of Rs 52.20 per unit, the proportionate bonus will apply to actual holdings.
Under the provisions of the NBFCs Rules- 2003 the Management Company is entitled to a remuneration of an amount not exceeding 3% of the average annual net assets of the Fund during the first five years of AGV Fund's existence and thereafter an amount equal to 2% of such assets of AGV Fund. The Management Company has charged its remuneration at the rate of 2.5 % per annum for the year under review.
The CDC Pakistan, the Trustee, in its Report dated February 10, 2006, has expressed the opinion that Alfalah GHP Investment Management Limited, the Management Company of AGV Fund, has in all material respects managed AGV Fund during the year ended December 31, 2006 in accordance with the provision of the Trust Deed and the NBFCs Rules-2003.
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Performance Statistics (Audited)
(Rs in, 000)
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Statement, Assets & Liab. (Dec. 31), 2006 2005
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Cash and Bank Balance: 243,547 126,770
Receivables against CFS: 83,315 82,164
Investments, AFS securities: 115,850 118,914
Investments, marketable
securities: 221,465 65,261
Other assets: 14,496 34,056
Total Assets: 680,588 431,181
Total Liabilities: 12,228 28,556
Net Assets/Unit Holders Fund: 668,360 402,625
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Ratios: 2,006 2,005
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Cash at Bank/Total Assets: 36% 29%
Investment, marketable/T. Assets: 33% 15%
Investments AFS/Total Assets: 17% 28%
Receivables under CFS/T. Assets: 12% 19%
Total Liabilities/Total Assets: 1.8% 6.6%
Net Assets/Total Assets: 98.2% 93.4%
Issue of units-net (Rs 000): 216,330 392,767
Number of Units in Issue: 11,684,272 7,856,417
Net Asset value per Unit-Rs: 57.20 51.25
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Income Statement 2006 (12 M) 2005 (2 M)
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Dividend & CFS Income: 15,345 2,050
Gain on sale of Investments: 52,085 7,402
Profit on Deposit accounts: 22,304 2,572
Other Income/(Loses): -4,122 1,837
Total Income: 85,612 13,861
Total Expenses: 24,090 7,697
Net Income from operations: 61,522 6,164
Element of gain in Unit price: 31,300 -19
Net Income: 92,822 6,145
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Ratios: 2006 (12 M) 2005 (2 M)
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Earnings per Unit-Rs: 7.94 0.78
Bonus per Unit (Face V. Rs 50/-) Rs: 5.00 0.00
Net income, Operations/T. Income: 72% 44%
Income Ele. Unit price/Total Income: 37% 0%
Management Co Exp./Total income: 15% 12%
Brokerage expense/Total Income: 5% 6%
Total Expenses/Total Income: 28% 56%
Return on Unit holders Fund: 13.89% 1.53%
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Cash Flow Summary 2006 (12 M) 2005 (2 M)
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Net Cash flow, Operations: -99,553 -265,997
Net Cash flow, Financing: 216,330 392,767
Net change in liquidity: 116,777 126,770
Net Liquidity at beginning: 126,770 0
Net Liquidity at end: 243,547 126,770
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COMPANY INFORMATION: : Management Company: Alfalah GHP Investment; Management Limited; Chairman: Aqueel Hassan; Chief Executive & Director: Abdul Aziz Anis; Director: Mohammad Yousuf; CFO & Company Secretary: Omer Bashir Mirza; Trustee: Central Depository Company of Pakistan Limited; Distributor & Bankers to the Fund: Bank Alfalah Limited; Legal Advisors: Bawany & Partners; Registrar: Alfalah GHP Investment Management Limited; Head Office: 12th Floor, Tower 'A', Saima Trade Towers, I.I. Chundrigar Road, Karachi; Auditors: KPMG Taseer Hadi & Co, Chartered Accountants; Web Address: www.alfalahghp.com
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