| FIRST CONSTELLATION MODARABA |
|
|
|
|
|
|
|
|
| (4th
Annual Report from January 1, 1995 to June 30, 1996) |
|
|
|
| Table
Of Contents |
|
| 1.
Corporate Information |
|
|
1 |
|
|
| 2.
Report of the Directors |
|
|
2 |
|
|
| 3.
Auditors' Report to the Certificate Holders |
5 |
|
|
| 4.
Balance Sheet |
|
|
|
6 |
|
|
| 5. Profit & Loss Account |
|
|
8 |
|
|
| 6. Statement of
changes in Financial Position |
9 |
|
|
| 7.
Notes to the Accounts |
|
|
11 |
|
|
| 8.
Pattern of Certificate Holders |
|
20 |
|
|
|
|
|
|
CORPORATE INFORMATION |
|
| Directors
of Modaraba Company: |
|
| Mohammad
Yousuf Memon |
|
| R.A.
Sattar* |
|
| Mohammad
Zakaria |
|
| Mohammad
Zain* |
|
| AUDITOR |
|
| Hayder
Bhimji & Company, |
|
| Chartered
Accountants |
|
| BANKERS |
|
| Askari
Commercial Bank Limited |
|
| ANZ
Grindlays Bank PIC |
|
| Faysal
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| Allied
Bank of Pakistan Limited |
|
| National
Bank of Pakistan |
|
| Bank
of Tokyo |
|
| Platinum
Bank Limited |
|
| Pan
African Bank Limited |
|
| LEGAL
ADVISORS |
|
| Mohammad
Aleem Khan, Advocate |
|
| MODARABA
COMPANY |
|
| Constellation
Management |
|
| Company
(Private) Limited |
|
| REGISTERED
OFFICE |
|
| 2nd
Floor, Trade Centre, |
|
| I.I.
Chundrigar Road, |
|
| Karachi. |
|
| REGISTRARS |
|
| MIPCO
Associates, |
|
| 10th
Floor, Uni Centre, |
|
| I.I.
Chundrigar Road, |
|
| Karachi. |
|
| *Induction
communicated to the concerned for assent. |
|
|
|
|
REPORT OF THE DIRECTORS |
|
| The
Board of the Directors of Constellation Management Company (Private) Limited, |
|
| the
Management Company of the First Constellation Modaraba takes pleasure in |
|
| presenting
the Fourth Annual Report of First Constellation Modaraba along with the |
|
| audited
financial statements for the period January 1st 1995 to 30th June 1996. |
|
|
| FINANCIAL
RESULTS |
|
| The
financial results of your Modaraba during the period mentioned above are |
|
| summarized
as follows: |
|
|
|
|
1996 |
|
1994 |
|
|
|
|
(Jan. 1st, 1995/ |
(Jan 1st, 1994/ |
|
|
|
|
|
June 30, 1996 |
Dec. 31st 1994 |
|
|
|
|
= 18 months) |
= 12 months) |
|
|
|
|
Rupees |
|
Rupees |
|
|
|
| Total
operating income |
|
30,817,846 |
|
30,678,966 |
|
| Total
operating expenses |
|
(25,600,842) |
(20,833,190) |
|
|
|
---------- |
|
---------- |
|
| Profit
before provision |
|
5,217,004 |
|
9,845,776 |
|
| Less:
Provisions |
|
— |
|
(4,587,903) |
|
|
|
---------- |
|
---------- |
|
| Profit
for the year/period |
|
5,217,004 |
|
5,257,873 |
|
| Modaraba
company's management fee |
|
(474,273) |
|
(477,988) |
|
|
|
|
---------- |
|
---------- |
|
| Profit
before tax |
|
|
|
4,742,731 |
|
4,779,885 |
|
| Provision
for tax |
|
|
(141,354) |
|
— |
|
|
|
|
---------- |
|
---------- |
|
| Profit
after tax |
|
|
4,601,377 |
|
4,779,885 |
|
| Unappropriated
profit b/f |
|
130,738 |
|
184,330 |
|
|
|
|
---------- |
|
---------- |
|
| Profit
available for appropriation |
|
4,732,115 |
|
4,964,215 |
|
| Less:
Statutory reserves |
|
(948,546) |
|
(955,977) |
|
| Transferred
to reserve for issue of dividend |
(3,554,375) |
|
(3,877,500) |
|
|
|
|
---------- |
|
---------- |
|
|
|
|
229,194 |
|
130,738 |
|
|
|
|
|
=========== |
|
=========== |
|
| PROFIT
DISTRIBUTION |
|
|
|
| The
Directors also take pleasure in announcing Cash Dividend at the rate of 5.5%
(five |
|
| and
half %) i.e. Rs. 0.55 per certificate of Rs. 10/= per value subject to
deduction of |
|
| Zakat
and Tax at source where applicable. This profit is being declared after
transferring |
|
| 20%
of net profit amount equivalent to Rs. 948,546/= to statutory reserves which
is |
|
| mandatory
requirement in terms of State Bank of Pakistan's Prudential Regulations. |
|
|
|
| The
payment of dividend under present Capital Market conditions is extremely
difficult, |
|
| but
this payment clearly indicates that your Modaraba even for its fourth year
ending |
|
| (June
30, 1996) has worked hard to pay the dividend, hence your Modaraba from its
first |
|
| year
of operation to date, has been regularly paying bonuses and dividend every |
|
| year/period
endings. |
|
|
|
| OPERATING
PERFORMANCE |
|
| Operation
of your Modaraba for the period under review was satisfactory, considering |
|
| the
prevailing economic conditions, Briefly the Gross Operating Income rose to
more |
|
| than
Rs. 30.817 million during the period under review as opposed to Rs. 30.678
million |
|
| previous
year, the operating expenses witnessed rise, as these stood around Rs. 25.600 |
|
| million
(for eighteen months) compared to over Rs. 20.833 during previous year
(twelve |
|
| months),
though these expenses appear to be on high side, but expenses for period |
|
| under
review are for 18 months period, thus if month to month comparison is made,
it |
|
| would
be quite clear that these expenses have in effect been reduced to a great |
|
| extent
showing management's full concentration on reducing expenditures, basically
if |
|
| higher
revenue increases are not achievable for any reason like in present case of |
|
| macro-economic
conditions, than acknowledging this situation, the management has |
|
| rightly
focused its attention on controlling costs. Operating results have yielded
profit |
|
| (before
charging of Management Company's Fee) for the period of Rs. 5.217 million |
|
| compared
to Rs. 5.257 during year ended December 31st 1994, as a result, the aforesaid |
|
| dividend
payment became possible. |
|
|
|
| Your
Modaraba's assets stood at Rs. 100.516 million on 30th June 1996 as compared
to |
|
| previous
year ending of Rs. 99.716 million, hence a marginal growth was achieved |
|
| during
the period under review. |
|
|
|
| CORPORATE
REVIEW |
|
| Investment
in the share/stock market was low, the main ingredients responsible for |
|
| consistent
fall in share prices were, frequent closure of business, uncertain law and
order |
|
| situation
etc. However and notwithstanding the above, it is anticipated that low trend
in |
|
| the
stock market as well as capital market shall shortly turn positive. |
|
|
|
| Leasing
business, for this business your Modaraba has paid heavy attention to
recovery of |
|
| its
outstanding leases, as full recovery, during the period under review was a
major |
|
| concern,
however, the lease volume has been kept at very low level, as the quantum of |
|
| leases
stood at over Rs. 5.165 million during period under review to previous year's
volume |
|
| of
about Rs. 18.974 million, this is so, because, of late, leasing business is
witnessing sluggish |
|
| period,
coupled with low return factor owing to leasing competition, as well as
relatively |
|
| lower
sectorial growth, etc. these happen to be some of the reasons attributable
for the |
|
| above,
but hopefully the leasing activities shall get into upswing as soon as the
economy |
|
| speed-up
its growth level, like stock exchanges, it is hoped that soon our economic |
|
| conditions
shall improve, and this business shall also show high growth. |
|
|
|
| Morabaha
financing activities as carried-out during period under review were of Rs. |
|
| 10.00
million against Rs. 33.00 million previous year, once again the market
conditions |
|
| are
not very conducive, but your Modaraba is continuously making efforts to
capture |
|
| promising
businesses for this type of financing. |
|
|
|
| SHORT
TERM INVESTMENT |
|
| Volume
of this business stood above 52.980 million during period under review as |
|
| opposed
to previous year's volume of above Rs. 19.275 million. Your Modaraba has
tried |
|
| its
best to increase the level of this activity resultantly the returns generated
and |
|
| recoveries
made, were satisfactory, continued efforts shall be made to improve this |
|
| business
in future. In short your Modaraba is endeavoring to evolve upon a strategy to |
|
| ensure
its continuous purposeful operation. |
|
|
|
| TAXATION |
|
|
| A
provision for tax at Rs. 0.141 million has been made at the rate of 12.5% of
the profit for |
|
| period
from July 1st 1995 to June 30, 1996 as during this period the Modaraba's tax |
|
| exemption
period of three assessment years (from the date of its commencement to |
|
| June
30,1995) stands expired. |
|
|
|
| FUTURE
PROSPECTS |
|
| During
the early years of operations, your Modaraba concentrated on creating a sound |
|
| base
for development of your Modaraba's funds in secured and income generating |
|
| investments.
Having created base, your management is now actively seeking access to |
|
| external
resources to increase nearing. |
|
|
|
| AUDITORS |
|
|
| The
present Auditors M/s Hyder Bhimji Chartered Accountants, being due for
retirement |
|
| have
offered themselves for re- appointment for the year ending June 30, 1997.
Their |
|
| appointment
has been confirmed by the Board subject to the approval of the |
|
| competent
authority. |
|
|
|
| ACKNOWLEDGEMENTS |
|
| The
Board of Directors records its appreciations and thanks for hard working and |
|
| dedicated
cooperation of the officials and staff of the Modaraba. Board is also
grateful |
|
| and
places its thanks to the Registrar Modaraba, and the State Bank of Pakistan
for their |
|
| kind
guidance. |
|
|
|
|
ON BEHALF OF THE BOARD |
|
| Karachi;
August 5th, 1996. |
|
|
CHIEF EXECUTIVE |
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|
|
|
|
|
|
|
|
|
| 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 Period ended June 30, 1996 (18 months) of First |
|
| Constellation
Modaraba, which are Modaraba Company's (Constellation |
|
| Management
Company (Pvt) Ltd) 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)
The Modaraba has recorded lease transactions as operating leases due to |
|
| reasons
explained in note 2.2 to the accounts. Whereas if these leases were |
|
| financial
leases, the International Accounting Standard 17 "Accounting for |
|
| Leases"
would have applied. |
|
| (b)
In our opinion, proper books of account have been kept by the Modaraba |
|
| Company
in respect of First Constellation Modaraba as required by the |
|
| Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, |
|
| 1980
and Modaraba Companies and Modaraba Rules,1981; and, |
|
| (c)
In our opinion the balance sheet and 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 |
|
| (d)
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 |
|
| accounts,
and except for the financial impact of the matter referred to in |
|
| para
(a) above which has not been quantified, 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 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 expenditures incurred by |
|
| the
Modaraba are in accordance with objects, terms and conditions of |
|
| the
Modaraba. |
|
|
|
| Karachi:
August 5th, 1996. |
|
HYDER BHIMJI & CO. |
|
|
|
Chartered Accountants |
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
Note |
1996 |
|
1994 |
|
|
(Jan. 1st, 1995/ |
(Jan 1st, 1994/ |
|
|
June 30, 1996 |
Dec. 31st 1994 |
|
|
= 18 months) |
= 12 months) |
|
|
Rupees |
|
Rupees |
|
|
|
|
|
|
| CAPITAL
AND RESERVES |
|
| Authorised |
|
| 30,000,000
Modaraba Certificates |
|
| of
Rs. 10/- each. |
|
300,000,000 |
|
300,000,000 |
|
|
|
============ |
|
============ |
|
| Issued,
Subscribed and paid-up |
|
|
|
| 5,000,000
Modaraba Certificates |
|
|
|
| of
Rs. 10/- each subscribed in cash |
|
50,000,000 |
|
50,000,000 |
|
|
|
|
|
| 1,462,500
Bonus Certificates of Modaraba |
|
|
| Rs.
10/- each issued as fully paid |
3 |
14,625,000 |
|
14,625,000 |
|
|
|
--------------------- |
|
--------------------- |
|
|
|
64,625,000 |
|
64,625,000 |
|
| Statutory
Reserve |
|
4 |
1,904,523 |
|
955,977 |
|
| Unappropriated
profit |
|
229,194 |
|
130,738 |
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
66,758,717 |
|
65,711,715 |
|
| Security
deposits from lessees |
|
2,164,146 |
|
4,758,077 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term Morabaha Finance-secured |
5 |
25,000,000 |
|
10,000,000 |
|
| Accrued
and other liabilities |
6 |
3,039,565 |
|
15,369,261 |
|
| Profit
distribution |
|
3,554,375 |
|
3,877,500 |
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
31,593,940 |
|
29,246,761 |
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
100,516,803 |
|
99,716,553 |
|
|
|
|
============ |
|
============ |
|
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
|
|
|
|
|
|
|
AS AT 30 JUNE, 1996 |
|
|
|
|
|
|
|
|
|
Note |
1996 |
|
1994 |
|
|
|
|
(Jan. 1st, 1995/ |
(Jan 1st, 1994/ |
|
|
|
June 30, 1996 |
Dec. 31st 1994 |
|
|
|
|
= 18 months) |
= 12 months) |
|
|
|
Rupees |
|
Rupees |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| At
cost less accumulated |
|
|
| amortization/depreciation |
|
|
|
| Assets
given on lease |
|
7.10 |
5,165,437 |
|
18,974,111 |
|
| Assets
in own use |
|
7.20 |
738,935 |
|
644,618 |
|
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
|
5,904,372 |
|
19,638,729 |
|
|
|
|
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
8 |
15,899,066 |
|
15,990,675 |
|
| DEFERRED
EXPENDITURE |
|
9 |
123,344 |
|
493,376 |
|
|
|
|
|
| CURRENT
ASSETS |
|
| Morabaha
transactions - Secured |
10 |
10,000,000 |
|
33,000,000 |
|
| Marketable
Securities/Short Term |
|
|
| Investments |
|
8.10 |
6,798,864 |
|
7,221,951 |
|
| Advances,
Deposits, Prepayments |
|
|
| Other
Receivables |
|
11 |
1,946,714 |
|
3,017,741 |
|
| Short
Term placement with banks |
|
52,980,565 |
|
19,275,265 |
|
| Bank
balance |
|
12 |
6,863,878 |
|
1,078,816 |
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
78,590,021 |
|
63,593,773 |
|
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
|
100,516,803 |
|
99,716,553 |
|
|
|
|
============ |
|
============ |
|
|
|
|
|
|
|
|
|
|
PROFIT AND LOSS ACCOUNT |
|
|
|
FOR THE PERIOD JANUARY
01, 1995 TO JUNE 30, 1996 |
|
|
|
|
|
|
|
Note |
1996 |
|
1994 |
|
|
|
|
|
(Jan. 1st, 1995/ |
(Jan 1st, 1994/ |
|
|
June 30, 1996 |
Dec. 31st 1994 |
|
|
= 18 months) |
= 12 months) |
|
|
Rupees |
|
Rupees |
|
|
|
| OPERATING
INCOME |
|
|
| Profit
on Morabaha transactions |
|
1,579,545 |
|
3,759,484 |
|
| Lease
Income |
|
|
21,833,567 |
|
21,805,991 |
|
|
|
|
|
|
--------------------- |
|
--------------------- |
|
| INCOME
FROM OPERATION |
|
|
23,413,112 |
|
25,565,475 |
|
| OTHER
INCOME |
|
13 |
7,404,734 |
|
5,113,491 |
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
30,817,846 |
|
30,678,966 |
|
| OPERATING
EXPENSES |
|
14 |
(25,600,842) |
|
(20,833,190) |
|
|
|
|
--------------------- |
|
--------------------- |
|
| OPERATING
PROFIT FOR THE YEAR/PERIOD |
|
5,217,004 |
|
9,845,776 |
|
| Less:
(Provision)/Reversal for |
|
| diminution
in the value of |
|
| marketable
securities |
|
|
-- |
|
(4,587,903) |
|
|
|
--------------------- |
|
--------------------- |
|
| PROFIT
BEFORE CHARGING MANAGEMENT FEE |
|
5,217,004 |
|
5,257,873 |
|
| MODARABA
COMPANY'S MANAGEMFNT FFF |
|
(474,273) |
|
(477,988) |
|
|
|
|
--------------------- |
|
--------------------- |
|
| PROFIT
BEFORE TAX |
|
4,742,731 |
|
4,779,885 |
|
| PROVISION
FOR TAX |
|
(141,354) |
|
-- |
|
|
|
|
--------------------- |
|
--------------------- |
|
| PROFIT
AFTER TAX |
|
4,601,377 |
|
4,779,885 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
130,738 |
|
184,330 |
|
|
|
|
|
|
--------------------- |
|
--------------------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
4,732,115 |
|
4,964,215 |
|
|
|
|
|
|
|
|
|
| APPROPRIATION: |
|
|
|
|
|
| STATUTORY
RESERVES |
|
|
|
(948,546) |
|
(955,977) |
|
| PROFIT
DISTRIBUTION IN CASH @ 5.5% (1994: 6%) |
(3,554,375) |
|
(3,877,500) |
|
|
|
|
|
--------------------- |
|
--------------------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
229,194 |
|
130,738 |
|
|
|
|
============ |
|
============ |
|
|
|
|
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
|
|
STATEMENT OF CHANGES IN
FlNANCING POSITION |
|
|
|
FOR THE YEAR ENDED 30
JUNE, 1996 |
|
|
|
|
|
|
|
|
|
1996 |
|
1994 |
|
|
(Jan. 1st, 1995/ |
(Jan 1st, 1994/ |
|
|
June 30, 1996 |
Dec. 31st 1994 |
|
|
= 18 months) |
= 12 months) |
|
|
Rupees |
|
Rupees |
|
|
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
| Profit
for the year/period |
|
4,601,377 |
|
4,779,885 |
|
|
|
|
|
|
| Changes
not effecting working capital |
|
|
|
| Amortization
of assets given on lease |
|
18,119,589 |
|
14,877,209 |
|
| Depreciation
on assets in own use |
|
388,213 |
|
215,514 |
|
| Provision
for diminution in the value of |
|
|
| marketable
securities |
|
-- |
|
4,587,903 |
|
| Amortization
of deferred expenditure |
|
37,003 |
|
269,116 |
|
| (Profit)
on disposal of fixed assets |
|
-- |
|
(115,771) |
|
| Dividend
Income |
|
|
(395,816) |
|
(192,859) |
|
| Capital
Gain/(Loss) on sale of |
|
|
| marketable
securities |
|
|
344,259 |
|
(204,733) |
|
|
|
--------------------- |
|
--------------------- |
|
|
|
18,826,277 |
|
19,436,379 |
|
| Operating
profit before working capital changes |
23,427,654 |
|
24,216,264 |
|
| Changes
in Working Capital |
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
| Morabaha
Transactions |
|
23,000,000 |
|
(11,000,000) |
|
| Marketable
Securities |
|
514,696 |
|
(23,623,879) |
|
| Advance,
deposit and other receivable |
|
1,071,027 |
|
(1,398,052) |
|
| Short
term placements |
|
(33,705,300) |
|
5,324,735 |
|
|
|
--------------------- |
|
--------------------- |
|
| Net
decrease in current assets |
|
(9,119,577) |
|
(30,697,196) |
|
| Increase/(decrease)
in current liabilities |
|
|
| Creditor,
accrued and other liabilities |
|
(12,328,325) |
|
13,720,940 |
|
|
|
|
|
| Net
decrease in working capital |
|
(21,447,902) |
|
(16,976,256) |
|
|
|
|
--------------------- |
|
--------------------- |
|
| Net
cash from operating activities |
|
1,979,752 |
|
7,240,008 |
|
|
|
============ |
|
============ |
|
|
|
|
| B.
CASH FLOW FORM INVESTING ACTIVITIES |
|
|
|
|
| Capital
expenditures |
|
|
5,501,477 |
|
998,920 |
|
| Dividend
Income |
|
|
395,816 |
|
192,859 |
|
| Sales
proceeds of assets given on lease |
|
— |
|
200,000 |
|
| Capital gain/(loss) on sale of |
|
|
|
| marketable
securities |
|
344,259 |
|
204,733 |
|
|
|
|
|
--------------------- |
|
--------------------- |
|
|
| Net
cash used in investing activities |
|
5,449,920 |
|
401,328 |
|
|
|
|
|
--------------------- |
|
--------------------- |
|
|
|
|
|
|
|
|
| C.
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
| Security
deposits |
|
|
1,867,270 |
|
1,622,512 |
|
| Dividend
paid |
|
|
3,877,500 |
|
— |
|
| Short
term morabaha |
|
|
15,000,000 |
|
7,450,000 |
|
|
|
|
|
----------------- |
