Dawood Money Market Fund (DMMF) was established under a Trust Deed, dated April 8, 2003 between Dawood Capital Management Limited (DCML) as a Management Company incorporated under the Companies Ordinance, 1984 and Bank Al-Habib Limited, as Trustee.
The SECP has authorised DMMF under the NBFCs (Est. & Reg.) Rules, 2003. DMMF is an open-end income fund that has been authorised to offer units under Rule 67 of the NBFCs (Est. & Reg.) Rules, 2003. The units are transferable and can also be redeemed by surrendering to DMMF. The units are listed on the Karachi Stock Exchange. DCML, the Management Company, was incorporated on September 18, 1990 in Pakistan, with its registered office in Karachi, Sindh. The company is registered on the Karachi Stock Exchange. DCML is registered as an NBFC under NBFC (Est. & Reg.) Rules-2003.
The company has further obtained the license to carry out investment advisory services and has been registered as an Investment Advisor under NBFC (Est. & Reg.) Rules-2003. Net profit of the company for the year ended June 30, 2006 was Rs 18.502 million (2005: Rs 16.592 million). The company has floated DMMF as open-end mutual fund and First Dawood Mutual Fund, a close-end fund.
DMMF was launched on May 20, 2003 with a record seed capital of Rs 300 million as core investment with the conditions that these core units are not redeemable for a period of two years from the date of issue. The principal activity of DMMF is to make investment in debt based securities including Government Securities, Commercial Paper and other money market instruments and placement of funds. DMMF has been rated "5 Star" by Pacra.
A total of 15.756 million units were issued in the year ended June 30, 2006 valued at Rs 1,666 million (2005: 17.707 million units worth Rs 1,856 million). During the year under review, 18.504 million units were redeemed, with a value of Rs 1,908 million (2005: 14.097 million units worth Rs 1,455 Million). As on June 30, 2006, the total number of outstanding units was 15.608 million valued as Rs 1,745 million. The 15.608 million Units of DMMF as on June 30, 2006 were held by 292 Unit Holders.
The holding of Units by different stakeholders was as follows: Dawood Capital Management Limited (1.4% of total), Guardian Modaraba (0.6%), Individuals (21.1%), Banks and DFIs (58.7%), Directors and CEO (0.1%), Retirement Funds (8.1%), public limited companies (3.4%) and others (6.4%). The Trustee (Bank Al-Habib Limited) has reported that in their opinion, Dawood Capital Management Limited, the Management Company has in all material respects managed DMMF during the period July 1, 2005 to June 30, 2006 in accordance with the provisions of the Trust Deed dated April 8, 2003 and the NBFC (Est. & Reg.) Rules -2003. DMMF's total income increased by 8% to Rs 225 million during the year ended June 30, 2006 as compared to Rs 208 million for the previous year.
Major income (over 85 %) came from COT, CFS, TFCs and placements. Element of Income and Capital Gains in Prices of Units Sold less Units Redeemed was 15% of the total income. The net income for the period increased by 10% to Rs 188 million (2005: Rs 171 million). Basic earnings per unit increased by 18% to Rs 12.07 (2005: Rs 10.24). Performance statistics are given below. The Board of the Management Company has declared a bonus dividend of Rs 11.50 per unit for year ended June 30, 2006 (2005: Rs 9.70). DMMF is distributing more than 90% of the income for the year and therefore the income of the Fund will not be subject to income tax under clause 99 of the Part I of the 2nd schedule of the Income Tax Ordinance 2001.
On June 30, 2006, the Net Asset Value (NAV) was Rs 111.7839. On February 24, 2007, the Units were being offered at Rs 108.3429 per unit and redeemed at Rs 107.2702 per unit. The Unit has a face value of Rs 100/-. DMMF claims to maintain a highly diversified portfolio of investment grade debt securities, government securities, money market instruments, continuous funding system (CFS) and spread transactions. The investment strategy of DMMF is reportedly modeled on a conservative approach towards investments with emphasis on the safety of capital and with the aim to achieve the highest rate of return while maintaining a low risk threshold. Investors are provided the convenience of redeeming units or subscribing to DMMF at their discretion.
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Performance Statistics (Audited) (Rs, 000)
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Balance Sheet (As on June 30) 2006 2005
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Cash and bank balance: 119,813 77,961
Receivables against CFS: 889,075 1,358,606
Preliminary Expenses: 897 1,397
Investments: 720,384 370,587
Advances & Other Receivables: 23,308 30,763
Total Assets: 1,753,477 1,839,314
Total Liabilities: 8,702 3,467
Net Assets: 1,744,775 1,835,847
No of Units in Issue: 15,608,455 16,733,410
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Net Assets represented by:
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Capital Account: 1,560,846 1,673,341
Unrealised deficit, Sec.
Re-measuring: -21,037 -16,331
Undistributed income
carried forward: 204,966 178,836
Total: 1,744,775 1,835,846
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Ratios:
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Cash at Bank/Total Assets: 4% 2%
Rec. against CFS/Total Assets: 51% 74%
Investments/Total Assets: 41% 20%
Total Liabilities/Total Assets: 0.5% 0.2%
Unit holders fund/Total Assets: 99.5% 99.8%
Net Asset Value (per unit) - Rs: 111.78 109.71
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Income Statement (Y end. Jun. 30) 2006 2005
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Income from COT: 31,053 144,898
Income from CFS: 120,851 0
Profit from TFCs: 30,603 18,972
Profit on GOP Securities: 4,200 4,200
Profit on Placements: 5,095 0
Profit on Bank Balance: 931 776
Capital Loss on Sale of Securities: -32 -792
Element of Income &
Cgain in Price: 32,709 39,735
Total Income: 225,410 207,789
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Ratios:
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Total Expenses/Total Income: 16% 18%
Net income/Total Income: 84% 82%
Remun. of DCML/Total Income: 5% 5%
Remun. of DCML/Total Expense: 31% 28%
Remun. of DCML/Total Assets: 0.7% 0.6%
Brokerage/Total income: 9% 11%
Brokerage/Total Expenses: 57% 61%
Basic Earnings per Unit- Rs: 12.07 10.24
Bonus Dividend per Unit - Rs: 11.50 9.70
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Cash Flow Summary 2006 2005
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Net Cash flow, Operations: 283,968 -347,542
Net Cash flow, Investing: 0 0
Net Cash flow, Financing: -242,118 400,670
Net change in liquidity: 41,850 53,128
Net Liquidity at beginning: 77,961 24,833
Net Liquidity at end: 119,811 77,961
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