| First Ibrahim Modaraba |
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| Contents |
|
|
| Modaraba
Information |
|
| Directors'
Report to the Certificate Holders |
|
| Auditors'
Report to the Certificate Holders |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
|
| Pattern
of Certificate Holdings |
|
|
|
| Modaraba
Information |
|
|
| Board
of Directors |
|
| Sheikh
Mukhtar Ahmed |
|
| (Chairman) |
|
| Sheikh
Mohammad Yaseen |
|
| Mr.
Mohammad Naeem Mukhtar |
|
| (Chief
Executive) |
|
| Mr.
Abdul Aziz Khan |
|
| Mr.
Anwar-ul-Haque |
|
|
| Auditors
of Modaraba |
|
| M/s.
M. Yousuf Adil Saleem & Co. |
|
| Chartered
Accountants, |
|
| A-35,
Block 7 & 8 |
|
| K.C.H.S.U. |
|
| Shahrah-e-Faisal |
|
| Karachi. |
|
|
| Bankers
of Modaraba |
|
| Muslim
Commercial Bank Limited |
|
| Askari
Commercial Bank Limited |
|
|
| Emirates
Bank International pjsc |
|
|
|
|
|
|
|
| Management
Company |
|
|
|
| Ibrahim
Modaraba (Pvt.) Limited |
|
|
| Ibrahim
Centre |
|
|
|
| GK-7/59,
Bagh-e-Zehra Street |
|
|
| Kharadar |
|
|
| Karachi. |
|
|
|
|
| Auditors
of Management Company |
|
| M/s.
Saleem Ahsan & Co. |
|
| Chartered
Accountants, |
|
| Ahsan
Chamber |
|
| 8-Syed
Mouj Darya (Edward) Road |
|
| Lahore. |
|
|
|
| Legal
Advisor |
|
| M/s.
Ch. Khurshid Law Associates |
|
| Advocates |
|
|
| 158,
District Courts |
|
| Faisalabad. |
|
|
|
| Registered
Office/ |
|
| Certificate
Transfer Office |
|
| Ibrahim
Centre |
|
| GK-7/59,
Bagh-e-Zehra Street |
|
| Kharadar |
|
|
| Karachi. |
|
|
|
|
| Directors'
Report to the Certificate Holders |
|
|
| We
are pleased to present before you the 6th Annual Review of First Ibrahim
Modaraba together with audited |
|
| accounts
for the year ended June 30, 1998. |
|
|
| Financial
Results |
|
| The
financial results of your modaraba for the year under review are summarized
as follows: |
|
|
|
|
|
For the |
|
|
|
|
Year Ended |
|
|
|
|
June 30, |
|
|
|
|
1998 |
|
|
|
|
Rupees |
|
|
| Total
income |
|
24,247,264 |
|
| Total
expenditures |
|
6,899,487 |
|
| Profit
before management fee |
|
17,347,777 |
|
| Modaraba
company's management fee |
|
1,577,071 |
|
| Profit
before taxation |
|
15,770,706 |
|
| Provision
for taxation |
|
1,971,338 |
|
| Net
profit after taxation |
|
13,799,368 |
|
| Unappropriated
profit brought forward |
|
895,701 |
|
| Total
profit available for appropriation |
|
14,695,069 |
|
|
| Appropriations |
|
|
| Your
Directors are pleased to recommend 10% dividend i.e. Rupee 1.00 per modaraba
certificate of Rs. 10 each |
|
| out
of profits earned. |
|
|
| Transfer
to special reserve |
|
2,759,874 |
|
| Proposed
dividend |
|
11,600,000 |
|
| Unappropriated
profit carried forward |
|
335,195 |
|
|
| Inspire
of overall slump in economy, the performance of your Modaraba is satisfactory
during the year under |
|
| review
and total income increased by 13% when compared with the previous year. |
|
|
| General
Review |
|
| The
management of your Modaraba concentrated on morabaha and musharika financing
during the year and |
|
| achieved
satisfactory operating results. We are happy to report that the modaraba is
able to build sound, profitable |
| morabaha
and musharika portfolio. Your management exercised a high degree of care in
the selection of the |
|
| clients
and kept in view their reputation. Consequently a steady income stream has
been generated with no |
|
| defaults
in the recovery. The policy of careful planning and cautious investment
continues to dominate the |
|
| operating
strategy of the modaraba alongwith its focus on continued growth and
increasing profitability. |
|
|
| Future
Prospects |
|
| Economy
of country has faced a deep and prolonged recession consequently the
financial sector has been effected |
| seriously.
However, income tax exemption allowed to modarabas from the income year
1998-99 will be beneficial |
|
| for
the modaraba sector. The management while looking forward with hope and
confidence in the coming year |
|
| will
continue its best efforts, skill and prudence to strengthen the base of
modaraba and to pass on maximum |
|
| return
to its certificate holders. |
|
|
| Solution
of Year 2000 Problem |
|
| The
company has assigned the task of year 2000 computer problem to its
consultants and by September, 1999 our |
|
| all
applications will be year 2k compliant. |
|
|
| Auditors |
|
| The
present auditors, M/s. M. Yousuf Adil Saleem & Co. Chartered Accountants,
being due for retirement, have |
|
| offered
themselves for re-appointment for the year ending June 30, 1998. Their
appointment has been confirmed |
|
| by
the Board subject to approval by the Registrar Modaraba. |
|
|
| Acknowledgement |
|
| The
board expresses its appreciation for guidance provided by Corporate Law
Authority, Registrar Modaraba, |
|
| State
Bank of Pakistan, continued support from certificate holders, banks and
financial institutions, hard work |
| and
positive efforts made by the staff. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
| Place:
Lahore. |
|
Mohammad Naeem Mukhtar |
|
| Date:
November 20, 1998 |
|
Chief Executive |
|
|
|
| Auditors'
Report to the Certificate Holders |
|
|
| We
have audited the annexed balance sheet as at June 30, 1998 and the related
profit and loss account and |
|
| statement
of changes in financial position, together with the notes to the accounts for
the year ended |
|
| June
30, 1998 of FIRST IBRAHIM MODARABA, which are Modaraba Company's (Ibrahim
Modaraba (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
IBRAHIM MODARABA as required by the Modaraba Companies and Modaraba |
|
| (Floatation
and Control) Ordinance, 1980 and Modaraba Companies and Modaraba Rules, 1981;
and |
|
|
| b)
in our opinion the balance sheet and profit and loss account have been drawn
up in conformity with the |
|
| Modaraba
Companies and Modaraba (Flotation and Control) Ordinance, 1980 and the
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, 1998 and the profit and
the changes in financial |
|
| position
for the year ended on that date; |
|
|
| ii)
the business conducted, investment made and expenditure incurred by the
Modaraba are in |
|
| accordance
with the objects, terms and conditions of the Madaraba; and |
|
|
| d)
Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 has been
deducted by the Modaraba |
|
| and
deposited in the Central Zakat Fund established under section 7 of that
Ordinance. |
|
|
| Place:
Lahore. |
|
M. Yousuf Adil Saleem & Co. |
|
| Date:
November 20, 1998 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet |
|
| as
at June 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Capital
and Reserves |
|
|
|
|
|
|
| Certificate
capital |
|
|
|
| Authorized |
|
|
|
| 20,000,000
Modaraba certificates |
|
|
| of
Rs. 10/- each |
|
|
200,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
2 |
116,000,000 |
116,000,000 |
|
| Special
reserve |
|
3 |
16,695,888 |
13,936,014 |
|
| Unappropriated
profit |
|
|
335,195 |
895,701 |
|
|
|
|
---------- |
---------- |
|
|
|
|
133,031,083 |
130,831,715 |
|
|
|
|
|
| Deferred
Liabilities |
|
|
|
|
| Gratuity |
|
|
126,937 |
84,400 |
|
|
|
|
|
| Current
Liabilities |
|
|
|
|
| Short
term loan |
|
4 |
2,500,000 |
- |
|
| Management
fee payable |
|
|
1,577,071 |
1,602,121 |
|
| Accrued
expenses |
|
|
118,280 |
69,899 |
|
| Provision
for taxation |
|
|
3,973,989 |
2,002,651 |
|
| Dividend
payable |
|
|
105,348 |
446,197 |
|
| Proposed
cash dividend |
|
|
11,600,000 |
10,440,000 |
|
|
|
|
---------- |
---------- |
|
|
|
19,874,688 |
14,560,868 |
|
|
|
---------- |
---------- |
|
|
|
153,032,708 |
145,476,983 |
|
|
|
|
========== |
========== |
|
|
| Operating
Fixed Assets |
|
5 |
756,889 |
970,371 |
|
|
|
|
|
|
| Deposits
and Deferred Cost |
|
6 |
- |
361,268 |
|
|
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
|
|
| Investment
in securities |
|
7 |
13,555,646 |
16,503,030 |
|
| Morabaha
receivables |
|
8 |
34,948,606 |
29,500,000 |
|
| Musharika
receivables |
|
9 |
80,000,000 |
66,000,000 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
10 |
21,442,555 |
21,066,655 |
|
| Cash
and bank balances |
|
11 |
2,329,012 |
11,075,659 |
|
|
|
|
---------- |
---------- |
|
|
|
|
152,275,819 |
144,145,344 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
153,032,708 |
145,476,983 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes from 1 to 18 form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended June 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Profit
on Morabahas/Musharakas |
|
|
22,278,366 |
20,852,369 |
|
|
|
|
| Operating
expenses |
|
|
| Administrative
expenses |
|
12 |
2,217,997 |
2,389,900 |
|
| Financial
charges |
|
13 |
472,840 |
693,738 |
|
|
|
|
---------- |
---------- |
|
|
|
|
2,690,837 |
3,083,638 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
19,587,529 |
17,798,731 |
|
| Other
income |
|
|
1,968,898 |
547,138 |
|
|
|
|
---------- |
---------- |
|
|
|
|
21,556,427 |
18,345,869 |
|
| Other
charges |
|
14 |
4,208,650 |
722,538 |
|
| Profit
before modaraba company's |
|
|
---------- |
---------- |
|
| management
fee |
|
|
17,347,777 |
17,623,331 |
|
| Modaraba
company's management fee |
|
|
1,577,071 |
1,602,121 |
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
15,770,706 |
16,021,210 |
|
| Provision
for taxation |
|
|
1,971,338 |
2,002,651 |
|
|
|
|
---------- |
---------- |
|
| Net
profit after taxation |
|
|
13,799,368 |
14,018,559 |
|
| Unappropriated
profit brought forward |
|
895,701 |
120,854 |
|
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
14,695,069 |
14,139,413 |
|
|
|
|
| Appropriation: |
|
|
| Special
reserve |
|
2,759,874 |
2,803,712 |
|
| Proposed
cash dividend @10 % (1997: @ 9%) |
|
11,600,000 |
10,440,000 |
|
|
|
---------- |
---------- |
|
|
|
14,359,874 |
13,243,712 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
335,195 |
895,701 |
|
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 18 form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) for the year ended June 30, 1998 |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| A.
Cash flow from operating activities |
|
|
|
|
|
| Profit
before taxation |
|
|
|
15,770,706 |
16,021,210 |
|
|
|
|
|
|
|
| Adjustments
to reconcile profit to net cash |
|
|
|
| provided
by operating activities |
|
|
|
|
|
|
|
|
|
|
| Gratuity |
|
|
|
42,537 |
84,400 |
|
| Depreciation |
|
|
|
85,763 |
127,639 |
|
| Amortization |
|
|
|
361,268 |
722,538 |
|
| Fixed
assets written off |
|
|
- |
3,937 |
|
| Financial
charges |
|
|
|
472,840 |
693,738 |
|
|
|
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
|
16,733,114 |
17,653,462 |
|
|
|
---------- |
---------- |
|
| Changes
in working capital |
|
|
|
| (Increase)/decrease
in current assets |
|
|
| Advances,
deposits and prepayments |
|
|
(307,162) |
(103,143) |
|
| Increase/(decrease)
in current liabilities |
|
|
| Management
fee |
|
(25,050) |
67,496 |
|
| Creditors,
accrued and other liabilities |
|
48,381 |
(128,186) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
(283,831) |
(163,833) |
|
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
|
16,449,283 |
17,489,629 |
|
| Financial
charges paid |
|
|
|
(472,840) |
(693,738) |
|
| Tax paid |
|
|
|
(68,738) |
(39,297) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
|
15,907,705 |
16,756,594 |
|
|
|
---------- |
---------- |
|
|
| B.
Cash flow from investing activities |
|
|
|
|
|
| Lease
deposit |
|
|
- |
33,000 |
|
| Investments
in securities |
|
2,947,384 |
(5,000,002) |
|
| Morabaha
receivables |
|
(5,448,606) |
(9,500,000) |
|
| Musharika
receivables |
|
(14,000,000) |
(26,000,000) |
|
| Proceeds
from disposal of fixed assets |
|
127,719 |
- |
|
|
|
---------- |
---------- |
|
| Net
cash used in investing activities |
|
(16,373,503) |
(40,467,002) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
| C.
Cash flow from financing activities |
|
|
|
|
|
| Payment
of lease liability |
|
|
- |
(10,878) |
|
| Dividend
paid |
|
|
|
(10,780,849) |
(12,668,002) |
|
| Morabaha
finance received |
|
|
2,500,000 |
- |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from financing activities |
|
|
(8,280,849) |
(12,678,880) |
|
|
|
|
---------- |
---------- |
|
| Net
(decrease)/increase in |
|
|
|
| cash
and cash equivalents (A+B+C) |
|
|
(8,746,647) |
(36,389,288) |
|
|
|
|
|
|
|
| Cash
and cash equivalents |
|
|
|
|
| at
the beginning of the year |
|
|
11,075,659 |
47,464,947 |
|
|
|
|
|
|
|
| Cash
and cash equivalents at the |
|
|
---------- |
---------- |
|
| end
of the year |
|
|
|
2,329,012 |
11,075,659 |
|
|
|
========== |
========== |
|
|
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| Notes
to the Accounts |
|
| for
the year ended June 30, 1998 |
|
|
| 1.1
Legal status and nature of business |
|
| First
Ibrahim Modaraba is a multi purpose, perpetual modaraba formed under the
Modaraba Companies |
|
| and
Modaraba (Flotation and Control) Ordinance, 1980 and rules framed thereunder
and is managed |
|
| by
Ibrahim Modaraba (Pvt.) Limited, a company incorporated in Pakistan under the
Companies |
|
| Ordinance,
1984 and registered with Registrar of Modaraba Companies and Modarabas under
the |
|
| Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, 1980. The Modaraba
is |
|
| listed
on stock exchanges in Karachi, Lahore and Islamabad. |
|
|
| 1.2
Significant accounting policies |
|
|
|
|
| 1.2.1
Accounting convention |
|
| These
accounts have been prepared on the basis of "Historical Cost
Convention". |
|
|
| 1.2.2
Staff retirement benefits |
|
| The
company operates an unfunded gratuity scheme covering all its employees.
Provision is |
|
| made
annually to cover the liability under the scheme. |
|
|
| 1.2.3
Taxation |
|
| Provision
for current taxation is based on taxable income at current tax rates after
taking into |
|
| account
tax rebates and tax credit available, if any. |
|
|
| 1.2.4
Fixed assets |
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation is
charged to income |
|
| on
the reducing balance method at the rates specified in operating assets note. |
|
|
|
|
| Depreciation
on additions during the year is charged on the basis of whole year while no |
|
| depreciation
is charged on deletions during the year. |
|
|
| 1.2.5
Deferred cost |
|
| These
are amortized to income over a maximum period of five years. |
|
|
| 1.2.6
Accounting for lease |
|
| The
Modaraba accounts for assets acquired under finance lease by recording the
assets and |
|
| related
liability. Finance charges are allocated to accounting period in a manner so
as to provide |
|
| a
constant periodic rate of charge on the outstanding liability. Assets are
amortized over the |
|
| period
of their useful life at the rates specified in the fixed assets note. |
|
|
| 1.2.7
Stock in trade |
|
| These
are stated at the lower of cost, determined on specific lot basis, and net
realizable value. |
|
| Net
realizable signifies the selling price in the ordinary course of business
less cost necessarily to |
|
| be
incurred in order to make the sale. Goods in transit are stated at invoice
value plus other |
|
| charges
incurred thereon. |
|
|
| 1.2.8
Marketable securities |
|
| Investments
in quoted shares are stated at lower of cost or market value determined on an |
|
| aggregate
portfolio basis. |
|
|
| 1.2.9
Revenue recognition |
|
| Sales
are recognized on despatch of goods to customers. |
|
|
| Profit
from Morabaha transaction is recognized on pro-rata accrual basis, calculated
on number |
|
| of
days funds were utilized. |
|
|
| Profit
on Musharaka investments and finance is accounted for on the basis of the
projected rate |
|
| of
profit. The effect of adjustments, if any, between actual rate and projected
rate of profit is |
|
| accounted
for at the time of determination of the actual rate. |
|
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 2.
Certificate capital - |
|
|
|
| issued,
subscribed and paid-up |
|
|
|
|
|
|
| Modaraba
certificates of Rs. 10/- each |
|
|
|
|
|
| 10,000,000 |
Certificates fully paid
in cash |
|
100,000,000 |
100,000,000 |
|
| 1,600,000 |
Issued as fully paid
bonus certificates |
16,000,000 |
16,000,000 |
|
| ---------- |
|
|
---------- |
---------- |
|
| 11,600,000 |
|
|
116,000,000 |
116,000,000 |
|
| ========== |
|
|
========== |
========== |
|
|
| 3.
Special reserve |
|
| This
represents the amount set aside out of profit after tax in accordance with
State Bank of Pakistan |
|
| NBFI
Circular No. 1 dated December 05, 1991 under this circular 20% of profits
after tax are to be |
|
| transferred
to a special reserve till such time that this reserve is equal to paid up
capital. |
|
|
| 4.
Short term loan |
|
| It
is a Morabaha facility received from First Hajveri Modaraba secured against
hypothecation of stocks |
|
| &
assets, promissory note and personal guarantee of directors of the company.
Mark-up is charged |
|
| @
23% per annum. |
|
|
|
| 5.
Operating fixed assets |
|
|
------------------------------------------------------------------------- |
|
|
|
COST |
|
|
DEPRECIATION |
|
|
|
--------------------------------- |
Book Value |
--------------------------------- |
|
|
As at |
|
As at |
as at |
Accumulated |
|
|
| Particulars |
|
July 01, |
Additions/ |
June 30, |
June 30, |
as at June |
Charge for |
Rate |
|
|
1997 |
(Deletion) |
1998 |
1998 |
30, 1998 |
the year |
(%) |
|
|
------------------------------------------------------------------------- |
|
| Furniture
and fixture |
970,871 |
- |
970,871 |
573,670 |
397,201 |
63,741 |
10 |
|
| Office
equipment |
283,613 |
- |
283,613 |
171,229 |
112,384 |
19,025 |
10 |
|
| Vehicles |
|
386,725 |
(346,460) |
40,265 |
11,990 |
28,275 |
2,997 |
20 |
|
|
------------------------------------------------------------------------- |
|
|
| Rupees |
|
1,641,209 |
(346,460) |
1,294,749 |
756,889 |
537,860 |
85,763 |
|
|
|
========================================================================= |
|
| 1997-
Rupees |
1,647,854 |
(6,645) |
1,641,209 |
970,371 |
670,838 |
127,639 |
|
|
========================================================================= |
|
|
| 5.1
Detail of fixed assets sold during the year |
|
|
|
|
|
Accumulated |
Book |
Sale |
Profit/ |
Particulars of purchaser |
| Particulars |
|
Cost |
Depreciation |
Value |
Proceeds |
(Loss) |
& mode of sale |
|
|
|
|
| Suzuki
Margalla |
