| FINANCIAL LINK MODARABA |
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| CONTENTS |
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| Corporate Information |
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| Directors' Review |
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| Key
Operating and Financial Data |
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| Pattern
of Holding of Certificates |
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| Auditors
Review Report on compliance with Code of Corporte Governance. |
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| Auditors' Report |
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| Balance Sheet |
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| Profit & Loss Account |
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| Statement
of Changes in Financial Position |
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| Statement
of changes in Equity |
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| Notes
to the Financial Statements |
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| |
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| CORPORATE
INFORMATION |
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| |
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| BOARD
OF DIRECTORS |
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| Shahid
Hameed |
Chairman |
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| Syed
Ghazanfar Ali |
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| Tasnimul Haq Farooqui |
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| Muhammad
Saeed Akhtar |
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| Sajid
Ali Abbasi |
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| Shahid
Abdulla |
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| Farooq Hashmi |
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| |
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| COMPANY SECRETARY |
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| Farooq Hashmi |
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| |
| AUDITORS |
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| Syed
Husain & Co. Chartered Accountants. |
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| BANKER |
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| Muslim
Commercial Bank Limited |
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| REGISTRAR |
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| Syed Husain & Co. |
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| 1st
Floor, Modern Motor House, |
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| Beaumont
Road, Karachi. |
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| |
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| REGISTERED OFFICE |
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| 1st Floor, Modern Motors
House, |
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| Beaumont
Road, Karachi. |
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| |
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| POSTAL ADDRESS |
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| 1st Floor, N.I.C.
Building, Abbasi Shaheed Road, |
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| Off
Shahra-e-Faisal, Karachi. |
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| |
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| DIRECTORS'
REVIEW |
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| The
Board of Directors of Financial Link Limited take pleasure in presenting the
audited accounts of the Financial |
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| Link
Modaraba for the year ended June 30, 2002. |
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| |
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| FINANCIAL
HIGHLIGHTS |
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2002 |
2001 |
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| |
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| Operating
Income / (Loss) |
|
35,081 |
20,369 |
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| Adjustment
in value of Investment |
|
6,955 |
- |
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| Less : |
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| Expenses |
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869,694 |
757,285 |
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| Loss
on diminution in value of Investment |
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|
1,871 |
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| Write-off
of Profit receivable |
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|
1,166,719 |
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| Financial
charges on Lease assets |
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- |
1,953 |
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| |
869,694 |
1,927,828 |
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| Operating
Profit/(Loss) for the period |
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(827,658) |
(1,907,459) |
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| Other income |
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91,499 |
19,223 |
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| Loss for the year |
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(736,159) |
(1,888,236) |
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| Un-appropriated
loss brought forward |
|
(98,658,664) |
(96,770,428) |
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| Losses carried forward |
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(99,394,823) |
(98,658,664) |
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| |
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| PROFIT
DISTRIBUTION |
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| |
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| The
Board of Directors of Modaraba Company have not recommended any dividend for
the year ended June 30, |
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| 2002,
in the light of accumulated losses suffered by the Modaraba. Accordingly, no
management fee has been given |
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| to
the company for the period under review. |
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| FUTURE OUTLOOK |
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| |
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| All
the investments, pledged with various financial institutions, have been
already settled. Presently, FLM is actively |
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| pursuing
a "Settlement Plan" according to which the management of the
Modaraba may be "taken-over" by a finan |
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| cial
institution. After finalization of "Management take-over," the
modaraba is envisaged to be reactivated by way of |
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| injection
of fresh capital, ensuring its revival and safegarding ihe interests of the
certificate holders. |
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| AUDITORS |
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| |
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| The
Present auditors Messrs "Syed Husain & Co", Chartered
Accountants being due for retirement, have offered |
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| themselves
for re-appointment for the year ending June 30, 2003. Their appointment has
been confirmed by the |
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| Board
of Directors, subject to the approval by the Registrar of Madaraba Companies
and Modarabas. |
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| |
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| SUMMERY
OF KEY OPERTING AND FINANCIAL DATA FOR THE LAST SIX YEARS |
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| |
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| A
summery of key operating and financial results for the last six years, is
included in the financial results for the year |
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| under review. |
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| OUTSTANDING
STATUTORY PAYMENTS |
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| |
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| There
are no outstanding statutory payments on account of taxes, duties, levies and
charges except of a normal and |
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| routine nature. |
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| COMMENTS
ON THE AUDITORS REPORT: |
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| |
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| The
Auditors have referred to certain matters in this report to the certificate
holders, which need to be classified as |
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| follows: |
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| |
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| The
Modaraba has accumulated losses of Rs. 99.39 million as at June 30, 2002
(2001: Rs. 98.66 |
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| million)
as against its paid-up capital of Rs. 100 million and statutory reserve of
Rs. 1.812 million. |
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| The
Modaraba earned a net loss of Rs. 0.736 million during the year (2001: Net
Loss of Rs. 1.88 |
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| million).
The Board of Directors of the Modaraba Company are making efforts for and are
confi |
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| dent
that the Modaraba would be taken over by prospective buyer. Therfore, these
financial |
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| statements
have been prepared under the going concern assumption. |
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| |
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| The
Board of Directors in their 27th meeting held on December 20, 2000 have
appointed |
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| Mr.
Farooq Hashmi as Chief Executive of the Modaraba Company. The Management
Company |
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| is
still awaiting approval of appointment from the Securities and Exchange
Commission of |
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| Pakistan.
Due to pending approval of the Chief Executive, these financial statements
have been |
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| signed
by three directors of the Modaraba Company. This is in contravention of
section 12(1) of |
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| the
Modaraba Companies and Modaraba Rules, 1981. |
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| |
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| MEETINGS
OF THE BOARD OF DIRECTORS |
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| |
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| During
the financial year, six meetings of the Board of Directors were held and
number of meetings each of the |
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| |
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| Directors
attended are mentioned below: |
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| Names of Directors |
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No. of meetings attended |
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| Mr. Shahid Hameed |
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6 |
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| Syed Ghazanfar Ali |
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5 |
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| Mr.
Tasnimul Haq Farooqi |
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6 |
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| Mr.
Muhammad Saeed Akhter |
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5 |
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| Mr. Sajid Ali Abbasi |
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5 |
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| Mr. Shahid Abdulla |
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1 |
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| Mr.
Farooq Hashmi (Proposed Director) |
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6 |
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| STATEMENT
IN COMPLIANCE OF THE CODE OF CORPORATE GOVERANCE |
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| The
Directors state that: |
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| |
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| a. The financial statements prepared by the
Management present a true and fair state of the Modaraba affairs. |
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| |
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| b. Proper books of accounts have been
maintained. |
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| c. Appropriate accounting policies have been
consistently applied in preparation of the financial statements and |
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| accounting
estimates are based on reasonable and prudent judgement. |
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| |
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| d. International accounting standards, as
applicable in Pakistan, have been followed in the preparation of finan |
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| cial
statements and any depature therefrom has been adequately disclosed. |
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| |
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| e. The system of internal control is sound
in design and has been effectively implemented and monitered. |
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| |
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| f. There is no significant doubt upon the
Modaraba's ability to continue as a going concern. |
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| |
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| g. There has been no material departure from
the best practices of corporate goverance, as detailed in the listed |
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| regulations. |
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| AUDIT COMMITTEE |
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| In
compliance to the code of Corporate Governance, the Board of Directors has
established an Audit Committee and |
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| the
following non-executive Directors are its members: |
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| |
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| Mr. Shahid Hameed |
Chairman |
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| Syed Ghazanfar Ali |
Member |
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| Mr. Farooq Hashmi |
Member |
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| |
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| PATTERN
OF SHAREHOLDING |
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| |
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| The
statement of pattern of shareholding is annexed to this report. |
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| ACKNOWLEDGEMENT |
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| |
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| The
Board wishes to place on record its appreciation for the dedicated, untiring
and positive efforts of all the |
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| members
of staff and valuable guidance and assistance extended to us by the Registrar
of Modaraba Companies |
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| and Modarabas. |
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| |
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| SHAHID
HAMEED |
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| Chairman |
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| |
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| Karachi:
September 27, 2002 |
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| KEY
OPERATING AND FINANCIAL DATA |
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| (Rupees in Thousand) |
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| |
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| PARTICULARS |
|
YEAR |
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| |
2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
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| Paid-up Capital |
|
100,000 |
100,000 |
100,000 |
100,000 |
100,000 |
100,000 |
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| Equity |
|
2,417 |
3,153 |
5,042 |
601 |
7,123 |
26,822 |
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| Current Liabilities |
|
182 |
614 |
706 |
32,336 |
47,142 |
65,384 |
|
| Fixed Assets |
|
19 |
43 |
42 |
33 |
35 |
480 |
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| Current Assets |
|
2,575 |
3,700 |
5,701 |
12,354 |
24,066 |
32,453 |
|
| Operating Profit/(Loss) |
|
(835) |
(1,905) |
(19,061) |
(8,326) |
(24,062) |
(25,454) |
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| Profit
/ (Loss) for the year |
(736) |
(1,888) |
4,441 |
(6,523) |
(19,699) |
(24,650) |
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| Earning per certificate |
|
-0.07 |
-0.19 |
0.44 |
-0.65 |
-1.97 |
-2.46 |
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| |
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| STATEMENT OF COMPLIANCE OF
CODE |
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| OF
CORPORATE GOVERNANCE |
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| |
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| The
Karachi Stock Exchange through Listing regulation No. 37 directed all the
listed Companies to imple |
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| ment
the Code of Corporate Governance. |
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| |
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| The
Board of Directors of Financial Link Limited has adopted the Code of
Corporate Governance and all |
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| the
necessary actions have been taken for all applicable and relevant Clauses and
the Board agrees to |
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| take
care of the remaining clauses as and when applicable. |
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| |
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| No. of |
Share Holding |
Total Shares |
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| Shareholders |
From |
To |
Held |
|
| 35 |
1 |
100 |
3,500 |
|
| 2,520 |
101 |
500 |
1,249,200 |
|
| 52 |
501 |
1000 |
49,400 |
|
| 60 |
1001 |
5000 |
159,700 |
|
| 38 |
5001 |
10000 |
336,500 |
|
| 6 |
10001 |
15000 |
72,500 |
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| 3 |
15001 |
20000 |
55,500 |
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| 2 |
20001 |
25000 |
42,300 |
|
| 5 |
25001 |
30000 |
145,100 |
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| 2 |
30001 |
35000 |
67,000 |
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| 2 |
40001 |
45000 |
82,300 |
|
| 1 |
45001 |
50000 |
50,000 |
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| 3 |
55001 |
60000 |
172,000 |
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| 5 |
60001 |
65000 |
324,000 |
|
| 1 |
65001 |
70000 |
66,500 |
|
| 2 |
95001 |
100000 |
200,000 |
|
| 1 |
115001 |
120000 |
116.3 |
|
| 1 |
145001 |
150000 |
145,400 |
|
| 1 |
290001 |
295000 |
290.5 |
|
| 3 |
295001 |
300000 |
900,000 |
|
| 1 |
340001 |
345000 |
345,000 |
|
| 1 |
345001 |
350000 |
348,600 |
|
| 1 |
370001 |
375000 |
375,000 |
|
| 1 |
375001 |
380000 |
376,000 |
|
| 1 |
580001 |
585000 |
580,800 |
|
| 2 |
600001 |
1100000 |
1,446,900 |
|
| 1 |
1600001 |
2100000 |
2,000,000 |
|
| 2,751 |
|
10,000,000 |
|
| |
|
| CATEGORIES
OF SHARE HOLDERS |
Number |
Shares held |
Percentage |
|
| |
| 1.
CENTRAL DEPOSITORY |
0 |
0 |
0 |
|
| 2.
FINANCIAL INSTITUTIONS |
11 |
1,770,500 |
17.705 |
|
| 3.
INSURANCE COMPANIES |
2 |
87,500 |
0.875 |
|
| 4.
INVESTMENT COMPANIES |
8 |
1,335,500 |
13.355 |
|
| 5.
MODARABA COMPANIES |
1 |
2,000,000 |
20 |
|
| 6.
JOINT STOCK COMPANIES |
11 |
2,004,200 |
20.042 |
|
| 7.
ASSOCIATED COMPANIES |
0 |
0 |
0 |
|
| 8.
DIRECTORS, CEO AND THEIR |
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| SPOUSES
AND MINOR CHILDREN |
0 |
0 |
0 |
|
| 9.
EXECUTIVES OF THE COMPANY/MODARABA |
0 |
0 |
0 |
|
| 10. OTHERS |
|
0 |
0 |
0 |
|
| 11. INDIVIDUALS |
|
2,718 |
2,802,300 |
28.023 |
|
| |
2,751 |
10,000,000 |
100 |
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| |
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| Shareholders
hold 10% or more voting in the Company. |
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| |
|
| 00001
Financial Link Limited |
|
2,000,000 |
20 |
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| |
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| REVIEW
REPORT TO THE CERTIFICATE HOLDERS ON STATEMENT OF |
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| COMPLIANCE
WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE |
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| |
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| We
have reviewed the Statement of Compliance with the best practices contained
in the Code of |
|
| Corporate
Governance prepared by the Board of Directors of Financial Link Limited (the
Modaraba |
|
| Company)
representing Financial Link Modaraba (the Modaraba) to comply with the
relevant Listing |
|
| Regulations
of the Karachi Stock Exchange where the Modaraba is listed. |
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| |
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| The
responsibility for compliance with the Code of Corporate Governance is that
of the Board of Directors |
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| of
the Modaraba Company. Our responsibility is to review, to the extent where
such compliance can be |
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| objectively
verified, whether the Statement of Compliance reflects the status of the
Modaraba's compli |
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| ance
with the provisions of the Code of Corporate Governance and report if it does
not. A review is limit |
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| ed
primarily to inquiries of the Modaraba personnel and review of various
documents prepared by the |
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| Modaraba
to comply with the Code. |
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| |
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| As
part of our audit of financial statements we are required to obtain an
understanding of the accounting |
|
| and
internal control systems sufficient to plan the audit and develop an
effective audit approach. We have |
|
| not
carried out any special review of the internal control system to enable us to
express an opinion as to |
|
| whether
the board's statement on internal control covers all controls and the
effectiveness of such inter |
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| nal controls. |
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| |
|
| Based
on our review, except for appointment of Chief Executive of the Modaraba
Company due to pend |
|
| ing
approval from Securities and Exchange Commission of Pakistan, nothing has
come to our attention |
|
| which
causes us to believe that the Statement of Compliance does not appropriately
reflect the |
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| Modaraba's
compliance, in all material respects, with the best practices contained in
the Code of |
|
| Corporate Governance. |
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| |
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| SYED HUSAIN & CO. |
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| |
|
| Chartered Accountants |
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| |
|
| Karachi:
September 27, 2002 |
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| |
|
| AUDITORS'
REPORT TO THE CERTIFICATE HOLDERS |
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| |
|
| We
have audited the annexed balance sheet as at June 30, 2002 and the related
profit and loss account |
|
| and
statement of changes in financial position together with the notes to the
financial statements for the |
|
| year
ended June 30, 2002 of Financial Link Modaraba which are Modaraba Company's
(Financial Link |
|
| Limited)
representation and we state that we have obtained all the information and
explanation which we |
|
| required
and after due verification thereof, we report that: |
|
| |
|
| (a)
in our opinion, proper books of account have been kept by the Modaraba
Company in |
|
| respect
of Financial Link Modaraba as required by the Modaraba Companies and
Modaraba |
|
| (Floatation
and Control) Ordinance, 1980, and Modaraba Companies and Modaraba Rules, |
|
| 1981; |
|
| |
|
| (b)
in our opinion, the balance sheet and the profit and loss account have been
drawn up in con |
|
| formity
with the Modaraba Companies and Modaraba (Floatation and Control)
Ordinance, |
|
| 1980,
and Modaraba Companies and Modaraba Rules, 1981; and |
|
| |
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to |
|
| us: |
|
| |
|
| (i)
the balance sheet and the related profit and loss account and statement of
changes in |
|
| financial
position, which are in agreement with the books of account, exhibit, |
|
| respectively
a true and fair view of the state of the Modaraba's affairs as at June
30, |
|
| 2002
and the loss and the changes in the financial position for the year ended on
that |
|
| date; |
|
| |
|
| (ii)
no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980;
and |
|
| |
|
| (iii)
the business conducted, investments made and expenditure incurred by the
Modaraba |
|
| are
in accordance with the objects, terms and conditions of the Modaraba; and |
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| |
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| Without
qualfying our opinion, we draw attention to the following: |
|
| |
|
| (a) Note 1.2 to the financial statements; the
Modaraba has accumulated losses of Rs. 99.39 million |
|
| (2001:
Rs. 98.66 million). The Board of Directors of the Modaraba Company are making
efforts for |
|
| and
are confident that the Modaraba would be taken over by a prospectve buyer.
Therefore, these |
|
| financial
statements have been prepared on a going concern assumption; and |
|
| |
|
| (b) Note 1.3 to the financial statements, due
to pending approval for appointment of Chief Executive of |
|
| the
Modaraba Company from Securities and Exchange Commission of Pakistan, the
financial |
|
| statements
of the Modaraba have been signed by three directors of the Modaraba Company.
This |
|
| is
in contravention of section 12(1) of the Modaraba Companies and Modaraba
Rules, 1981. |
|
| |
|
| SYED
HUSSAIN & CO. |
|
| |
|
| Chartered Accountants |
|
| |
|
| Karachi:
27th September, 2002 |
|
| |
|
| BALANCE SHEET |
|
| |
|
| |
|
2002 |
2001 |
|
| |
Note |
Rupees |
Rupees |
|
| CAPITAL
AND RESERVES |
|
| Authorised capital |
|
| 25,000,000
modaraba certificates of Rs. 10 each Issued, subscribed and paid-up capital |
250,000,000 |
250,000,000 |
|
| 10,000,000
modaraba certificates of Rs. 10/- each |
|
|
|
| fully paid in cash |
|
100,000,000 |
100,000,000 |
|
| Statutory reserve |
|
1,812,104 |
1,812,104 |
|
| Accumulated Loss |
|
(99,394,823) |
(98,658,664) |
|
| |
2,417,281 |
3,153,440 |
|
| |
|
|
| CURRENT
LIABILITIES |
|
|
|
| Accrued expenses |
|
113,004 |
544,773 |
|
| Unclaimed
profit distribution |
|
69,016 |
69,016 |
|
| |
182,020 |
613,789 |
|
| |
|
|
| |
|
|
| |
2,599,301 |
3,767,229 |
|
| |
|
| The
annexed notes form an integral part of these financial statements. |
|
| |
|
| AS AT JUNE 30, 2002 |
|
|
| |
|
| |
|
2002 |
2001 |
|
| |
Note |
Rupees |
Rupees |
|
| |
|
|
| TANGIBLE
FIXED ASSETS |
|
3 |
19,450 |
43,340 |
|
| LONG
TERM INVESTMENTS |
|
4 |
4,490 |
4,175 |
|
| CURRENT ASSETS |
|
|
|
| Short term investments |
|
5 |
32,113 |
25,473 |
|
| Musharika investment |
|
6 |
116,000 |
3,352,019 |
|
| Advances,
prepayments and other receivables |
|
7 |
260,772 |
236,218 |
|
| Cash
and bank balances |
|
8 |
2,166,476 |
106,004 |
|
| |
2,575,361 |
3,719,714 |
|
| |
| |
|
| PROFIT AND LOSS ACCOUNT |
|
|
| FOR
THE YEAR ENDED JUNE 30, 2002 |
|
|
| |
|
| |
|
2002 |
2001 |
|
| |
Note |
Rupees |
Rupees |
|
| |
|
|
