Question 04.

(A)
Adeeb textiles Limited Employees’ provident fund, (The Fund) has a total fund balance of RS. 500 million
as at January 2021. Every month an additional 10 million becomes available to the fund. Investment
profile of the fund stands as per following:

Name of Company Security Amount in Comments

RS
1 million TFC issued by XYZ Steel limited, a listed 10 Million TFC were issued two years ago and carry
company a mark-up @ 11% per annum
3 million units of Asghari Mutual Fund- An equity 30 Million Asghari mutual fund is management by
based collective investment scheme. Asghari Asset Management company
Limited.
10 million units of Baghi Money market Fund 100 Baghi Money Market Fund is managed
Million by Bagh Asset Management Company
Limited.

The Fund is contemplating to make following investments:

a. Making an investment in purchase of 21 million TFC’s issued by Agha Steel limited, total size of
the investment shall be RS. 21 Million. This TFC shall carry a mark-up @ 12 % p.a.
b. Making an investment in purchasing the TFC issued by Mughal Confectioneries limited, a listed
company. A total of 18 million shall be invested by the fund. The total issue size of the fund is RS.
120 million
c. Making an investment in Adeeb limited’s debentures for an amount of Rs. 20 Million. The issue
size of the fund is 100 million.
d. An investment in the IPO of the Lucky Star Limited amounting to 15 million for 1.5 million shares
of the company. The total issue size is 20 Million shares. The total paid up capital after this issue
shall consist of 40 Million shares.

Required:
Advise whether or not the above investments made/to be made by the company are in accordance with
the requirements of the Employees Contributory Fund (Investment in listed securities) Regulations 2018.
Marks 12
Question 04. (B)
Petition for winding up of Khatam Limited has been filed in the court on 31 December 2019. The court
has ordered the winding up of the company on March 20, 2020. Following transactions took place on the
given dates:
a. On July 01, 2019, the directors passed a BOD resolution to sell certain machinery items of the
company to another company working in the same industry. One of the directors of Khatam
Limited had a shareholding of 5% in that other company and this interest was properly disclosed.
Such machinery had a useful life of 3 more years as at the date of disposal. The directors,