नागरिक लगानी कोषको वित्तीय अवस्था तथा विवरणCitizen Investment Trust: Financial Position and Disclosure

Citizen Investment Trust

Financial Position of the Fund (Unaudited)

As of Ashadh end 2083

Sources of Fund Rs. in Thousands

Particulars 2082/83 Ashadh End 2081/82 Ashadh End

Applications of Fund Rs. in Thousands

Particulars 2082/83 Ashadh End 2081/82 Ashadh End

1. Financial Statement

The balance sheet and profit/loss statement for the quarterly period are as stated above.

2. Management Analysis

Since the Trust collects funds of long-term nature and makes daily payments from the monthly collection amount of participants, liquidity management is convenient. The major source of income of the Trust consists of service fees obtained from schemes operated by the Trust, interest income, and cash dividends. The Trust has initiated the process of operating a closed-ended mutual fund scheme. The Trust prioritizes investment diversification.

3. Details Regarding Legal Actions

(a) Writ petitions have been filed naming the Trust as defendant regarding deducting only 5 percent tax instead of withholding tax at the rate of 15 percent under Section 88 Subsection (1) of the Income Tax Act, 2058 when making non-contribution-based retirement benefit payments to retired employees of related institutions from the Gratuity Fund and Investor Account Scheme, and various orders have been issued by the Honorable Supreme Court and High Courts in this regard.

(b) Upon reassessment of tax for F.Y. 2074/075 by the Large Taxpayers Office stating that deducting only 5 percent tax on the gratuity fund amount was incorrect, penalties were imposed on the Trust. The Trust filed an administrative review with the Inland Revenue Department, Lazimpat, which upheld the decision of the Large Taxpayers Office. Subsequently, an appeal was filed with the Revenue Tribunal Kathmandu on 2082 Ashwin 02, and the decision of the Revenue Tribunal Kathmandu dated 2083 Baishakh 31 set aside the decision of the Inland Revenue Department, Lazimpat.

4. Analysis Regarding Share Transactions of Organized Institution

(a) Shares of the Trust are traded under the open market in the secondary market of Nepal Stock Exchange Ltd. The Trust management holds a neutral stance on this matter.

(b) Maximum, minimum, closing price, total trading days, and number of shares traded during the quarterly period:

Maximum Price Minimum Price Closing Price Total Trading Days Traded Shares Quantity

1,860.00 1,630.30 1,670.00 64 3,37,980

5. Problems and Challenges

The software being used by the Trust for all transactions and other

The figures in the above statement may change as per the auditor's suggestions.

Particulars

Financial Ratios & Other Information:

Overall As on Ashad 2083 As on Ashad 2082

Return on Investment (ROI) 4.27% 5.68%

Fund to Investment ratio 95.15% 99.08%

Weighted average cost of fund 4.17% 5.23%

Earning Per Share (in Rs.) - Annualized 19.84 19.34

The fund faces internal challenges and issues such as making software compatible for integration with software used by entities, completing old account reconciliation, and maintaining attractive return rates for participants. Similarly, external challenges include competition in capital market operations, non-recovery of regular loans provided to Nepal Airlines Corporation, mandatory transition of affiliated organizations and participants to the Social Security Fund, and the impact on the fund's business due to contribution-based pension programs operated by other entities. Likewise, due to excess liquidity in the market, the sharp decline in fixed deposit interest rates poses a challenging impact on the financial situation of the programs/schemes operated by the Fund. To address these challenges, the Fund has adopted strategies such as regularly updating its software and implementing it across all programs, digitalizing the Fund's services, making bank reconciliation swift and robust, and safely diversifying investments to provide attractive returns to participants.

6. Corporate Governance

The Board of Directors, as the apex body of the Fund, is responsible to shareholders and holds the responsibility for maintaining corporate governance. Trustee sub-committees headed by a director have been formed to operate, monitor, and certify financial statements of schemes/programs run by the Fund. Trustees remain accountable to participants. To maintain financial discipline and internal control systems, an Audit Committee is formed under the convenorship of a director. An Anti-Money Laundering and Combating the Financing of Terrorism Monitoring Sub-committee has been formed under the convenorship of a director. Reports on activities performed in this regard are submitted periodically to the committee. Investment and Loan sub-committees have been formed under the convenorship of the Executive Director of the Fund. Investments are made adhering to specified procedures and criteria within the limits of the investment policy. Loans to participants are provided under the loan procedures.

7. Chief Executive's Declaration on Truth and Accuracy

As of today, I personally take responsibility for the accuracy of the information and details mentioned in this report. Furthermore, I declare that to the best of my knowledge and belief, the details mentioned in this report are true, factual, and complete, and no details, notices, or information necessary for investors to make informed decisions have been concealed.