United Money Market Fund (UMF) was established under a Trust Deed, executed between UBL Funds Managers Limited (formerly United Asset Management Company Limited), as its Management Company and CDC Pakistan, as its Trustee. The Trust Deed executed on May, 8, 2002 was approved by SECP on May 9, 2002 in accordance with the AMC Rules, 1995, since repealed and replaced by the NBFCs Rules- 2003, under which the Management Company is registered. The Trust Deed has been amended vide the supplemental Trust Deeds dated October 11, 2002, May 4, 2004, June 17, 2004 and April 21, 2005. UMF 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 UMF at the option of the unit holders.
The pattern of unit holding as on June 30, 2006 was fairly spread among different categories of unit-holders as shown below:
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Category & No of Accounts Units Held % of Total
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Individuals (605): 3,567,851 11%
Retirement Funds (42): 2,341,455 7%
Insurance Companies (5): 3,236,723 10%
PSEs and Corp (11): 10,795,103 32%
Associated Co Bank (2): 4,557,454 13%
Others (36): 9,261,826 27%
Total (701): 33,760,412 100%
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During the year ended June 30, 2006, the offer price and the repurchase prices per unit ranged between Rs 110.2246 and Rs 100.6272 as compared to Rs 104.7011 and Rs 97.8258 per unit during the previous year (Par value per unit being Rs 100). According to the notes to the financial statements, units issued are recorded at the offer price, as determined by UMF, for the applications received by it.
The offer price represents the net assets value of units as of the close of the previous business day plus provision of duties and charges and provision of transaction costs, if applicable.
Units repurchased are recorded at the repurchase price, applicable on units for which UMF receives repurchase applications. The repurchase price represents the net assets value of units as of the previous day less back-end load, duties, taxes, charges on repurchase and provision of transaction costs, if applicable.
Total Assets of UMF have on June 30, 2006 increased to Rs 4.322 billion as compared to Rs 3.041 billion as on June 30, 2005, an increase of 42%. The Unit Holders Fund however increased by 22% to Rs 3.715 billion as on June 30, 2006 as compared to Rs 3.033 billion as on June 30, 2005.
The number of units in issue on June 30, 2006 was 33.760 million (2005: 19.273 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 321 million compared to Rs 126 million for the previous year.
Total Income of UMF for year ended June 30, 2006 increased by 139 % to Rs 428 million (2005: Rs 179 million). According to the Directors' Report, UMF's strategy for the current year remained focused on investing in high yielding short term investment avenues such as CFS(30% of Total Assets), bank deposits (26%), Investments (28%) and Placements (14%).
The expenses for the year doubled to Rs 106 million compared to Rs 53 million for the previous year. The net income for the year under review saw 155% increase to Rs 321 million (75% of Total Income) compared to Rs 126 million (71% of Total Income) for the previous year. The Directors in their Report attribute the increase to overall increase in fund size. Per unit earnings improved to Rs 9.52 from Rs 4.35 for the previous year.
Performance statistics are given below. The directors in their report state that for the current year Bonus distribution of 10 units for every 100 units held has been approved. The current year's distribution amounting to Rs 338 million is 184% more than last year (2005: Rs 118.775 million). This amount represents 105% of current year's profit.
This percentage of distribution shall ensure that tax exemption under clause 99 of Part 1 of the Second Schedule of the Income Tax Ordinance 2001, is availed by UMF and the returns for the year are exempt from Income Tax.
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 UMF during the first five years of UMF's existence and thereafter an amount equal to 2% of such assets of UMF. The Management Company has during the year under review charged its remuneration at the rate of 1.5 % per annum of the daily average net assets of UMF for the year.
The Trustee, in its Report dated July 8, 2006, has expressed the opinion that UBL Fund Manager Limited, the Asset Management Company has in all material respects managed UMF during the year ended June 30, 2006 in accordance with the provision of the Trust Deed (and the modifications since authorized by the SECP) and the NBFCs Rules-2003.
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Performance Statistics (Audited) (Rs in, 000)
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State., Assets & Liab. (June 30), 2006 2005
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Cash and Bank Balance: 1,126,088 422,198
Receivables against CFS: 1,296,305 885,073
Investments: 1,219,425 992,327
Placements: 585,000 660,000
Other assets: 95,456 81,074
Total Assets: 4,322,274 3,040,672
Total Liabilities: 607,603 7,502
Net Assets/Unit Holders Fund: 3,714,671 3,033,170
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Ratios:
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Cash at Bank/Total Assets: 26% 14%
Placements/Total Assets: 14% 22%
Investments/Total Assets: 28% 33%
Receivables under CFS/Total Assets: 30% 29%
Total Liabilities/Total Assets: 14.1% 0.2%
Net Assets/Total Assets: 85.9% 99.8%
Issue of units-net (Rs, 000): 325,844 954,004
Number of Units in Issue: 33,760,412 28,969,813
Net Asset value per Unit-Rs: 110.03 104.70
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Income Statement 2006 2005
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Total Financial Income: 475,377 192,601
Other Income/(Loses): -47,421 -13,864
Total Income: 427,956 178,737
Total Expenses: 106,577 52,710
Net Income: 321,379 126,027
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Ratios:
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Earnings per Unit-Rs: 9.52 4.35
Dividend (Bonus) Per Unit - Rs: 10.00 4.10
Financial Income/Total Income: 111% 108%
Management Co Exp./Total income: 14% 18%
Brokerage expense/Total Income: 7% 8%
Income Element, unit pri./T. Income: -8% 43%
Total Expenses/Total Income: 25% 29%
Net Income/Total Income: 75% 71%
Return on Unit holders Fund: 8.65% 4.15%
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Cash flow Summary 2006 2005
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Net Cash flow, Operations: 378,046 -762,839
Net Cash flow, Financing: 325,844 954,004
Net change in liquidity: 703,890 191,165
Net Liquidity at beginning: 422,198 231,033
Net Liquidity at end: 1,126,088 422,198
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