|
|
|
|
|
|
|
|
|
|
|
| Confidence
Modaraba Management (Pvt.) Ltd. |
|
|
| Accounts
For the Eighteen Months Period Ended 30 June 1996 |
|
|
| Managed
By:- |
|
| Confidence
Modaraba Management (Pvt) Limited |
|
|
| Modaraba
Information |
|
|
|
| Modaraba
Company |
|
| Confidence
Modaraba Management (Pvt.) Ltd. |
|
|
| Directors
of Modaraba Company |
|
| Esmail
Ahmad Bagasrawala |
|
Chairman |
|
|
| Shah
Abu Saad Ahmed |
|
Chief Executive |
|
| Mohammad
Saleera Adam |
|
| Mohammad
Haroon Barai |
|
| Muhammad
Arif Abdul Latif |
|
|
| Auditors
of the Modaraba |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants. |
|
|
| Auditors
of the Modaraba Company |
|
| Daudally,
Lalani & Company |
|
| Chartered
Accountants |
|
|
| Bankers |
|
| Askari
Commercial Bank Limited |
|
| Habib
Bank AG Zurich |
|
| Faysal
Bank Limited |
|
| Banque
Indosuez |
|
| Soneri
Bank Limited |
|
| Metropolitan
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| Prudential
Commercial Bank Limited |
|
|
| Registered
Office |
|
| 6th
Floor, A1-Falah Court, |
|
| I.I.
Chundrigar Road, Karachi-74200 Pakistan |
|
| pH:
2634249-51, 2635011-13 |
|
| Fax
No. 00-9221-2631310 |
|
|
| Registrar
and Share Registration Office |
|
| Hameed
Majeed Associates (Pvt) Ltd. |
|
| 5th
Floor, Karachi Chamber, |
|
| Hasrat
Mohani Road, Karachi. |
|
| PH:
2411474 - 2424828 |
|
|
|
|
| Directors
Report of Modaraba Company |
|
| For
the eighteen month period ended 30 June 1996 |
|
|
| ALLAH
IN HIS BENIGN MERCY has granted us an opportunity to present the audited
accounts of the |
|
| First
Confidence Modaraba. In order to comp}y with Finance Act 1995, the accounting
year of the |
|
| modaraba
has been changed from December 31 to June 30. The accounts being presented
have, |
|
| therefore,
been prepared for a period of eighteen months ended 30 June 1996, |
|
|
| Financial
Results |
|
| Financial
results are summarised as under:- |
|
|
|
30 June |
31 December |
|
|
|
|
1996 |
1994 |
|
|
|
|
(Rupees in thousand) |
|
| Profit
for the period/year before |
|
|
|
| Management
fee |
|
11,640 |
20,702 |
|
|
|
|
|
| Less:
Modaraba Company's management fee |
|
(1,058) |
(1,650) |
|
| Add:
Unappropriated profit brought forward |
|
796 |
505 |
|
|
|
|
|
--------- |
--------- |
|
| Profit
available for appropriation |
|
|
11,378 |
19,557 |
|
|
|
|
|
|
|
| Appropriations |
|
|
|
|
|
| Interim
- profit distribution @ 6.5% (1994: NIL) |
3,933 |
-- |
|
| Final
- profit distribution @ 8.5% (1994: @ 17%) |
5,142 |
9,350 |
|
| Bonus
certificate - NIL (1994: @ 10%) |
|
-- |
5,500 |
|
| Transfer
to statutory reserve |
|
|
2,116 |
3,911 |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
11,191 |
18,761 |
|
|
|
|
|
|
|
|
|
|
--------- |
--------- |
|
| Unappropriated
profit carried forward |
|
187 |
796 |
|
|
========= |
========= |
|
|
|
| Operations
during the period under review |
|
| The
Modaraba's trading business of import & export has suffered great setback
because of the |
|
| government's
changing policies, uncertain market conditions, premature withdrawal of tax
exemption, |
|
| and
devaluation. However, the Modaraba has been able to earn somewhat respectable
profit by |
|
| diversifying
its business in leasing, Musharaka and Morabaha financing. |
|
|
| The
Modaraba has taken a very realistic view of its investment policy and has
provided for Rs. 5.839 |
|
| million
towards diminution in the market value of the securities held by it in it's
investment portfolio. No |
| doubt
it has reduced our profit substantially but it is a wise and practical
approach in the present day |
|
|
| situation,
when the stock market continues to be bearish in the present economic
conditions of the |
|
| country.
Modaraba has. indeed operated under difficult conditions such as funding and
regulatory |
|
| constraints
and extremely sluggish stock market. All these factors combined together have
reduced the |
|
| profitability
of the Modaraba. |
|
|
| Future
Prospects |
|
| Notwithstanding
the above circumstances, your Modaraba continues to enjoy inherent strength
and |
|
| expects
to produce better results in future due to increased investment in lease
financing after the |
|
| removal
of present credit restraints, improvement in stock market as a result of the
steps taken by the |
| caretaker
government to improve the economy of the country. |
|
|
| Appointment
of Auditors |
|
| The
present auditors Messrs. Taseer Hadi Khalid & Co. Chartered Accountants
being due for |
|
| retirement
have offered themselves for re-appointment for the year 30 June 1997. Their
appointment |
|
| has
been confirmed by the Board subject to the approval of the Registrar,
Modaraba Companies and |
|
| Modarabas. |
|
|
| Acknowledgment |
|
| The
Board wish to place on record their gratefulness to all our certificate
holders for their continued |
| confidence,
the State Bank of Pakistan, Corporate Law Authority and Registrar Modaraba
Companies |
|
| and
Modarabas for their guidance and to the staff for their dedicated efforts and
service to the cause of |
| the
Modaraba. |
|
|
| For
and on behalf of board of Directors |
|
|
| Esmail
Ahmed Bagasrawala |
|
| Chairman |
|
|
|
|
| KPMG |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants |
|
|
| First
Floor |
|
| Sheikh
Sultan Trust Building No. 2 |
|
| Beaumont
Road |
|
|
|
|
| Karachi
75530 Pakistan. |
|
|
|
|
|
|
| Telephone |
5671761 - 3 5685847-9 |
|
| Fax |
|
92 (21) 5685095 |
|
|
|
| Auditors'
Report to the Certificate Holders |
|
| We
have audited the annexed balance sheet as at 30 June 1996 and the related
profit and loss account |
|
| and
statement of changes in financial position together with the notes to the
accounts for the eighteen |
| month's
period ended 30 June 1996 of First Confidence Modaraba which are Modaraba |
|
| Company's
[Confidence Modaraba Management (Private) Limited] representation and we
state that we |
|
| have
obtained all the information and explanations 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 |
|
| First
Confidence Modaraba as required by the Modaraba Companies and Modaraba
(Floeration |
|
| 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 |
|
| conformity
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
explanation 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 30 June 1996 and
the profit |
|
| and
the changes in financial position for the eighteen month's period ended on
that date; |
|
|
| (ii)
zakat deductible at source under the Zakat and Ushr Ordinance, 1980 have been
deducted |
|
| by
the Modaraba and deposited in the Central Zakat Fund established under
section 7 of |
|
| that
Ordinance; 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. |
|
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants |
|
|
| Karachi:
December 11, 1996 |
|
|
|
| Balance
Sheet |
|
| as
at 30 June 1996 |
|
|
|
|
30 June |
31 December |
|
|
|
Note |
1996 |
1994 |
|
| CAPITAL
AND RESERVES |
|
|
|
| CERTIFICATE
CAPITAL |
|
| Authorised |
|
| 10,000,000
Modaraba Certificates |
|
| of
Rs. 10/- each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
=========== |
=========== |
|
|
|
|
| Issued,
subscribed and paid up |
|
3 |
60,500,000 |
55,000,000 |
|
| Statutory
reserve |
|
|
4 |
6,027,943 |
3,911,409 |
|
| Reserve
for proposed issue of |
|
| bonus
certificates |
|
|
-- |
5,500,000 |
|
|
| Unappropriated
profit |
|
186,770 |
795,634 |
|
|
|
|
---------- |
---------- |
|
|
|
|
66,714,713 |
65,207,043 |
|
|
|
|
|
|
|
| LONG
TERM LIABILITIES |
|
|
|
| Security
deposits on leases |
|
2,611,471 |
-- |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Short
term morabaha finances-secured |
5 |
26,400,000 |
-- |
|
| Creditors, accrued expenses |
|
|
|
|
|
| and
other liabilities |
|
|
6 |
4,458,399 |
21,592,911 |
|
| Management
fee payable |
|
|
1,058,267 |
1,540,016 |
|
| Lease
rentals received in advance |
|
107,052 |
|
| Unclaimed
profit distribution |
|
130,819 |
49,188 |
|
| Proposed
profit distribution |
|
5,142,500 |
9,350,000 |
|
|
|
|
---------- |
---------- |
|
|
|
37,297,037 |
32,532,115 |
|
| COMMITMENTS |
|
7 |
|
|
---------- |
---------- |
|
|
|
Rupees |
|
106,623,221 |
97,739,158 |
|
|
=========== |
=========== |
|
|
|
|
30 June |
31 December |
|
|
|
Note |
1996 |
1994 |
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
assets - At cost less |
|
| accumulated
depreciation |
|
8 |
1,655,236 |
2,035,347 |
|
|
| NET
INVESTMENT IN LEASES |
|
9 |
43,118,778 |
-- |
|
|
|
|
|
|
|
|
| DEFERRED
COSTS |
|
10 |
158,069 |
36l,298 |
|
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stock
in trade |
|
11 |
3,718,811 |
16,710,608 |
|
| Current
portion of net investment in leases |
9 |
9,944,698 |
-- |
|
| Marketable
securities |
|
12 |
17,910,952 |
14,022,078 |
|
| Finance
under Morabaha arrangement |
|
13 |
10,000,000 |
-- |
|
| Musharaka
finance |
|
14 |
924,496 |
27,500,000 |
|
| Trade
debts-unsecured - considered good |
|
391,375 |
-- |
|
| Advances,
deposits, prepayments |
|
|
| &
other receivables |
|
15 |
16,959,885 |
2,759,467 |
|
|
|
|
| Cash
and bank balances |
|
16 |
1,840,921 |
34,350,360 |
|
|
|
|
61,691,138 |
95,342,513 |
|
|
---------- |
---------- |
|
|
|
|
Rupees |
|
106,623,221 |
97,739,158 |
|
|
=========== |
=========== |
|
|
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
| Chief
Executive |
|
| Confidence
Modaraba |
|
| Management
(Pvt) Ltd. |
|
|
| Director |
|
| Confidence
Modaraba |
|
| Management
(Pvt) Ltd. |
|
|
| Director |
|
|
| Confidence
Modaraba |
|
| Management
(Pvt) Ltd. |
|
|
| Profit
and Loss Account |
|
| For
the period from 01 January 1995 to 30 June 1996 |
|
|
|
Eighteen |
Year |
|
|
|
months |
ended |
|
|
|
|
|
period ended |
31 December |
|
|
|
|
Note |
30 June 1996 |
1994 |
|
|
|
|
| Trading
profit |
|
|
17 |
8,186,965 |
12,753,486 |
|
| Profit
on musharaka finance |
|
1,981,694 |
433,356 |
|
| Profit
on morabaha financing |
|
3,057,167 |
-- |
|
| Leasing
income |
|
|
2,551,319 |
-- |
|
| Other
revenue |
|
|
18 |
345,954 |
4,042,404 |
|
|
---------- |
---------- |
|
|
|
|
16,123,099 |
17,229,246 |
|
| Operating
expenses |
|
|
| Administrative
and selling |
|
|
19 |
3,582,452 |
2,234 |
|
| Amortisation
of deferred cost |
|
203,229 |
135,486 |
|
| Financial
charges |
|
|
20 |
7,013,620 |
3,333,369 |
|
|
---------- |
---------- |
|
|
|
|
10,799,301 |
5,703,016 |
|
|
|
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
5,323,798 |
11,526,230 |
|
| Other
income |
|
|
21 |
12,155,963 |
10,016,070 |
|
|
---------- |
---------- |
|
|
|
|
17,479,761 |
21,542,300 |
|
|
|
|
|
|
| Other
charges |
|
|
22 |
-- |
135,525 |
|
| Provision
for diminution in the |
|
| value
of marketable securities |
|
|
5,838,824 |
704,700 |
|
|
---------- |
---------- |
|
|
|
|
5,838,824 |
840,225 |
|
|
---------- |
---------- |
|
|
|
|
| Profit
before modaraba company's |
|
| Management
fee |
|
|
|
11,640,937 |
20,702,075 |
|
| Modaraba
company's management fee |
|
1,058,267 |
1,650,000 |
|
|
---------- |
---------- |
|
| Profit
for the period/year |
|
|
10,582,670 |
19,052,075 |
|
| Unapprorpriated
profit brought forward |
|
795,634 |
504,968 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
11,378,304 |
19,557,043 |
|
|
|
|
|
|
| Appropriations |
|
|
| Interim
profit distribution @ 6.50% (1994: Nil) |
|
3,932,500 |
-- |
|
| Proposed
final profit distribution @8.5%(1994: @17%) |
5,142,500 |
9,350,000 |
|
| Reserve
for proposed issue of bonus |
|
| certificates
NIL (1994: @ 10%) |
|
|
-- |
5,500,000 |
|
| Transfer
to statutory reserve |
|
2,116,534 |
3,911,409 |
|
|
---------- |
---------- |
|
|
|
|
11,191,534 |
18,761,409 |
|
|
|
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit |
|
|
Rupees |
186,770 |
795,634 |
|
|
=========== |
=========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
| Statement
of Changes in Financial Position |
|
| For
the eighteen months period ended 30 June 1996 |
|
|
|
Eighteen |
Year |
|
|
months |
ended |
|
|
period ended |
31 December |
|
|
30 June 1996 |
1994 |
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
for the period/year |
|
|
10,582,670 |
19,052,075 |
|
|
| Adjustments
for: |
|
| Depreciation |
|
|
|
602,403 |
370,273 |
|
| Amortisation
of deferred costs |
|
|
203,229 |
135,486 |
|
| Loss
on sale of fixed assets |
|
|
-- |
29,175 |
|
| Loss/(gain)
on sale of marketable securities |
|
1,452,889 |
(2,728,709) |
|
| Dividend
income |
|
|
|
(1,551,343) |
(1,113,695) |
|
| Underwriting
fee |
|
|
|
(247,500) |
(200,000) |
|
| Profit
on musharaka finances |
|
|
(1,981,694) |
(433,356) |
|
| Profit
on short term morabaha finances |
|
6,246,237 |
2,834,850 |
|
| Provision
for diminution in value |
|
|
|
|
| of marketable securities |
|
|
5,838,824 |
704,700 |
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
|
21,145,715 |
18,650,799 |
|
| (Increase)
in net investment in lease finance |
|
(55,063,476) |
-- |
|
|
---------- |
---------- |
|
|
|
|
(31,917,761) |
18,650,799 |
|
| (Increase)/decrease
in operating assets |
|
|
|
| Stock
in trade |
|
|
|
12,991,797 |
10,996,775 |
|
| Trade
debts |
|
|
|
(391,375) |
16,301,801 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
|
(3,743,357) |
2,647,955 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
8,857,065 |
29,946,531 |
|
| Increase/(decrease)
in operating liabilities |
|
|
| Creditors,
accrued expenses and other liabilities |
(17,963,903) |
(10,527,601) |
|
| Lease
rentals received in advance |
|
107,052 |
-- |
|
| Management
fee payable |
|
|
(481,749) |
640,016 |
|
|
---------- |
---------- |
|
|
|
|
(18,338,600) |
(9,887,585) |
|
|
|
|
|
|
|
---------- |
---------- |
|
| Cash
(used for)/generated from operations |
|
(41,399,296) |
38,709,745 |
|
| Income
tax paid |
|
|
|
(9,978,438) |
(12,713) |
|
| Profit
distributed |
|
|
(13,200,869) |
(6,213,812) |
|
|
---------- |
---------- |
|
| Net
cash (used for)/generated from |
|
|
|
|
| operating
activities |
|
c/f |
(64,578,603) |
32,483,220 |
|
|
|
Eighteen |
Year |
|
|
months |
ended |
|
|
period ended |
31 December |
|
|
|
30 June 1996 |
1994 |
|
|
| Net
cash (used for)/generated from |
|
| operating
activities |
|
|
b/f |
(64,578,603) |
32,483,220 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Proceeds
from sale of securities |
|
|
15,260,497 |
20,378,240 |
|
| Purchase
of Securities |
|
|
(26,441,084) |
(26,888,112) |
|
| Dividened
Income |
|
|
|
1,167,323 |
1,107,595 |
|
| Underwriting
fee |
|
|
|
247,500 |
200,000 |
|
| Underwriting
fee |
|
|
26,575,504 |
(27,500,000) |
|
| Musharaka
finances |
|
|
|
(2 22,292) |
(1,271,948) |
|
| Sale
proceeds of fixed assets |
|
-- |
7,500 |
|
| Security
deposit on leases |
|
|
2,611,471 |
-- |
|
| Morabaha
finance |
|
|
(10,000,000) |
-- |
|
|
|
|
------------ |
------------ |
|
| Net
cash used for investing activities |
|
9,198,919 |
(33,966,725) |
|
|
|
|
|
|
|
|
|
|
------------ |
------------ |
|
|
|
|
(55,379,684) |
(1,483,505) |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Changes
in short term morabaha finances |
|
26,400,000 |
(17,993,000) |
|
| Profit
on short term morabaha finances |
|
(5,416,846) |
(3,229,556) |
|
| Profit
on Musharaka |
|
|
1,887,091 |
-- |
|
|
|
|
------------ |
------------ |
|
| Net
cash generated from/(used for) |
|
| financing activities |
|
|
|
22,870,245 |
(21,222,556) |
|
|
|
|
------------ |
------------ |
|
| Net
Increase/(decrease)in cash and cash equivalents |
(32,509,439) |
(22,706,061) |
|
| Cash
& cash equivalents at the beginning of the |
|
| period/year |
|
|
34,350,360 |
57,056,421 |
|
|
|
|
------------ |
------------ |
|
| Cash
& cash equivalents at the end |
|
| of
the period/year |
|
Rupees |
|
1,840,921 |
34,350,360 |
|
|
|
|
============ |
============ |
|
|
| Notes
to the Accounts |
|
| For
the eighteen months period ended 30 June 1996 |
|
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| First
Confidence Modaraba is a multipurpose, perpetual modaraba registered under
the Modaraba |
|
| Companies
and Modaraba (Floatation and Control) Ordinance, 1980 and rules framed
thereunder and |
|
| is
managed by Confidence Modaraba Management (Private) Limited, a company
incorporated in |
|
| Pakistan
under the Companies Ordinance, 1984 and registered with the Registrar of
Modaraba |
|
| Companies
and Modaraba under the Modaraba Companies and Modaraba (Floatation and
Control) |
|
| Ordinance,
1980. The Modaraba is listed on Karachi Stock Exchange and is principally
engaged in |
|
| the
business of Morabaha and Musharaka financing, commodity trading, investment
in marketable |
|
| securities,
leasing and other related business in accordance with the injunctions of
Islam. |
|
|
| 1.1
Income year |
|
| The
Finance Act 1995 abolished the option available for adopting the calendar
year for tax |
|
| purposes
as the income year for business income and all such assesses were required to |
|
| adopt
the financial year (June 30 year end) as the income year effective from
Income tax |
|
| assessment
year 1995-96. |
|
|
|
|
| In
order that the Modaraba's accounting year may correspond with the tax income
year, the |
|
| Management
Company has decided to change its accounting year from December 31 to |
|
