| Asset Investment Bank Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Directors'
Report |
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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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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| COMPANY
INFORMATION |
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| CHAIRMAN |
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| S.M. Abdullah |
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| CHIEF
EXECUTIVE |
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| Syed
Naveed H. Zaidi |
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| DIRECTORS |
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| Dr. Khalid lqbal |
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| Mohammad
Ashiq Rehmani |
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| Rana
M. Abu Obaida |
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| Azhar
Tariq Khan |
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| Sohail Ali |
|
| Shamim
I. Junejo |
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| COMPANY
SECRETARY |
|
| Muhammad
Naeem Aslam |
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| BANKERS |
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| Habib
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| National
Development Finance Corporation |
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| Habib
American Bank |
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| AUDITORS |
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| Ford,
Rhodes, Robson, Morrow |
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| Chartered
Accountants |
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| REGISTRAR |
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| Nobel
Computer Services (Pvt) Limited |
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| 14-Banglore
Town, Housing Society, |
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| Sharea
Faisal, Karachi |
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| Phones:
(021) 4546978, 4520121, Fax: (021) 4314962 |
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| REGISTERED
OFFICE |
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| 301
& 302, 3rd Floor |
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| Muhammad
Gulistan Khan House |
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| Blue
Area, Islamabad |
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| Phone:
(051) 2270621,2822513 |
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| Fax:
(051) 2272506 |
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| LIAISON
OFFICE |
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| 715, 7th Floor |
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| Progressive
Plaza, Civil Lines, Karachi |
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| Phones:
(021) 5689580, 5687412 |
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| Fax:
(021) 5687829 |
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| Telex:
20538 ASSET PK |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 8th Annual General Meeting of Asset Investment Bank
Limited |
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| will
be held at 301 & 302, 3rd floor, Muhammad Gulistan Khan House, 82-East,
Fazal-uI-Haq |
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| Road,
Blue Area, Islamabad on Saturday, December 30, 2000, at 10.00 a.m. to
transact the |
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| following
business: |
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| ORDINARY
BUSINESS |
|
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| 1)
To confirm the minutes of Annual General Meeting held on December 30, 1999. |
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| 2)
To receive, consider and adopt the audited accounts of the Company for the
year ended |
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| June
30, 2000 together with the Directors' and Auditors' Reports thereon. |
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| 3)
To appoint Auditors for the next term and fix their remuneration. |
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| The
present Auditors, M/S Ford, Rhodes, Robson, Morrow, Chartered Accountants
retire |
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| and
being eligible, offer themselves for re-appointment. |
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| 4)
To transact any other business with the permission of the chair. |
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By order of the Board |
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| Islamabad |
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|
Muhammad Naeem Aslam |
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| December
09, 2000 |
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|
Company Secretary |
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| 1.
A member entitled to attend and vote at the above meeting may appoint any
other person as his/her proxy. The instrument |
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| appointing
a proxy should be signed by the member or his/her attorney duly authorized in
writing. If a member is a |
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| corporation,
either it's common seal be affixed to the proxy form or the Board of
Directors' resolution/power of attorney |
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| along
with specimen signature of the nominee shall be submitted with the proxy
form. The proxy shall have a right to |
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| attend,
speak and vote in the place of the member. |
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|
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| 2.
Proxies in order to be effective must be received at the Registered Office of
the Company not later than forty-eight hours |
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| before
the time of the meeting and must be duly stamped, signed and witnessed. |
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|
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| 3.
Proxy need not be a member. |
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|
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| 4.
CDC account holder will further have to follow the under mentioned guidelines
specified by the Securities and Exchange |
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| Commission
of Pakistan: |
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|
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| i.
In case of individuals. the account holder or sub-account holder and/or the
person whose securities are in group |
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| account
and their registration details are uploaded as per the Regulations, shall
submit the proxy form as per the |
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| above
requirement. |
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|
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| ii.
The proxy form shall be witnessed by two persons whose names, addresses and
NIC numbers shall be |
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| mentioned
on the form. |
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|
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| iii.
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished with the proxy |
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| form. |
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|
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| iv.
The proxy shall produce his original NIC or original passport at the time of
the meeting. |
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| v.
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen signature of the |
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| nominee
shall be submitted along with proxy form to the company. |
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| 5.
The members are requested to immediately notify the change in address, if
any. |
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| 6.
The Share transfer books of the Company will remain closed from December 24,
2000 to December 30, 2000 both days |
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| inclusive |
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| DIRECTORS'
REPORT |
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| The
directors of Asset Investment Bank Limited are submitting the 8th Annual
Report of |
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| the
Bank together with the audited accounts for the year ended June 30, 2000. |
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| FINANCIAL
REVIEW |
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| After
the change in the Government, our economy is passing through transitional
phase |
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| with
the result that the new solid investment opportunities are hardly coming up
but at the |
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| same
time, the financial analysts are closely watching the inherent strength of
the overall |
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| economy,
thereby causing uncertainty in continuation of various programmes launched |
|
| by
the Government for the revival of economy. Since, the financial sector's
health is |
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| directly
proportional to business and economy, it is pre-mature to foresee the future.
For |
|
| the
year under review the Bank had to take difficult decisions to convert the bad
debts |
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| into
either recoveries or good assets. These decisions have both negative and
positive |
|
| affects.
On the negative side the capital was eroded, resulting in basic loss of Rs.
5.03 per |
|
| share
and on the positive side, the management was able to make substantial
recoveries. |
|
|
| Although
stock market showed some improvement but only in selective scripts so on the |
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| recommendation
of Auditors, our Bank had to make provision for diminution in value to |
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| the
tune of Rs.4.864 million during the current year thus bringing the total
provisions |
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| made
so far to the level of Rs. 10.60 million. |
|
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| Although
the Auditors observation in para (e) of their report has been explained in |
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| relevant
notes but following is the management's view on the issues: |
|
|
| *
The dispute between Muslim Commercial Bank Limited and Asset Investment |
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| Bank
Limited is being negotiated and hopefully will be decided in favour of our |
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| Bank. |
|
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| *
Asset Group's involvement in day-to-day affairs of Caravan East Fabrics
Limited |
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| combined
with vigilant financial control is showing fruitful results. The |
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| Management
of Caravan East Fabrics Limited is quite confident to start making |
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| repayment
by March 2001. |
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|
|
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| *
The management of our Bank is trying its best to arrange payment from its |
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| associated
company to Investment Bank and to release our placement. |
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| The
management of Asset Investment Bank Limited is engaged in serious
negotiations |
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| with
financially sound group to increase its Paid-up Capital and the entire
endeavour is |
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| bring
the current ratio at the desired level by taking other appropriate steps. |
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| PATTERN
OF SHAREHOLDING |
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| The
pattern of shareholding as at June 30, 2000 is annexed. |
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| AUDITORS |
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| The
present auditors, M/S Ford, Rhodes, Robson, Morrow, Chartered Accountants
retire, |
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| and
being eligible, offer themselves for re-appointment. |
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| ACKNOWLEDGEMENT |
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| The
management of Asset Investment Bank Limited is making all out efforts to
improve |
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| the
financial health of the Bank and really thankful to the concern officials of
State Bank |
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| of
Pakistan and the Securities and Exchange Commission of Pakistan for their
support |
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| and
guidance. We also extend appreciation to depositors, clients and
correspondents for |
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| their
trust and support and for recognition of Bank's service. |
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| The
Board wishes to place on record its appreciation of the work and concerted
efforts of |
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| the
company personnel. |
|
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| We
seek Allah's guidance and His blessings in achieving our objectives. |
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|
On behalf of the Board |
|
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|
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| Islamabad |
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|
Syed Naveed H. Zaidi |
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| December
04, 2000 |
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Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of Asset Investment Bank Limited as at
June |
|
| 30,
2000 and the related profit and loss account, cash flow statement and
statement of |
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| changes
in equity, together with the notes forming part thereof, for the year then
ended |
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| and
we state that we have obtained all the information and explanation which, to
the best |
|
| of
our knowledge and belief, were necessary for the purposes of our audit. |
|
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| It
is the responsibility of the company's management to establish and maintain a
system |
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| of
internal control, and prepare and present the above said statements in
conformity with |
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| the
approval accounting standards and the requirements of the Companies
Ordinance, |
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| 1984.
Our responsibility is to express an opinion on these statements based on our
audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in |
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| Pakistan.
These standards require that we plan our audit to obtain reasonable assurance |
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| about
whether the above said statements are free of any material misstatement. An
audit |
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| includes
examining, on test basis, evidence supporting the amounts and disclosures in
the |
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| above
said statements. An audit also includes assessing the accounting policies and |
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| significant
estimates made by the management, as well as, evaluating the overall |
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| presentation
of the above said statements. We believe that our audit provides a reasonable |
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| basis
for our opinion and, after due verification, we report that- |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as |
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| required
by the Companies Ordinance, 1984; |
|
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| b)
in our opinion- |
|
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| (i)
the balance sheet and profit and loss account, together with the notes |
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| thereon,
have been drawn up in conformity with the Companies Ordinance, |
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| 1984,
and are in agreement with he books of account and are further in |
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| accordance
with accounting policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of Company's |
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| business; |
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|
|
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| (iii)
the business conducted, investments made and the expenditure incurred |
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| during
the year were in accordance with the objects of the Company; |
|
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| (c)
in our opinion and to the best of our information and according to the |
|
| explanations
given to us, the balance sheet, profit and loss account, cash flow |
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| statement
and the statement of changes in equity, together with the notes forming |
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| part
thereof, conform with approved accounting standards as applicable in |
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| Pakistan,
and, give the information required by the Companies Ordinance, 1984, |
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| in
the manner so required and respectively give a true and fair view of the
state of |
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| the
Company's affairs as at June 30, 2000 and of the loss, its cash flows and |
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| changes
in equity for the year then ended; |
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|
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| (d)
in our opinion, zakat deductible at source, if any, under the Zakat and Ushr |
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| Ordinance,
1980 was deducted by the Company and deposited in the Central |
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| Zakat
Fund established under section 7 of that Ordinance; and |
|
|
| (e)
without qualifying our opinion- |
|
|
| (i)
we draw attention to notes 10.2, 13.1, 17.1 and 19.1 to the accounts. |
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| Pending
outcome of the efforts being made by the Company, no provision |
|
| against
the amounts stated in the above notes has been made; and |
|
|
|
|
| (ii)
without taking into consideration the effect of the matter included in (i) |
|
| above,
we draw ..attention to the fact' that as on June 30, 2000 accumulated |
|
| losses
of the Company has diminished its equity by Rs.79.567 million, the |
|
| current
liabilities have 'exceeded the current assets by Rs.97.412 million |
|
| and
the Company has significant exposure to contingencies as disclosed in |
|
| note
10 to the accounts. These factors have a bearing on the Company's |
|
| ability
to meet its obligations and to continue as a going concern. |
|
| However,
these accounts have been prepared on a going concern basis for |
|
| the
reasons disclosed in note 2 to the accounts. |
|
|
| Islamabad |
|
|
Ford, Rhodes, Robson, Morrow |
|
| December
04, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorized
capital- |
|
| 20,000,000
ordinary shares of Rs. 10/- each |
|
200,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital- |
|
| 10,000,000
ordinary shares of Rs.10/- each fully paid in cash |
100,000,000 |
100,000,000 |
|
| Reserves |
|
| Capital
reserves- |
|
| Statutory/special
reserve |
|
4 |
2,387,791 |
2,387,791 |
|
| Revenue
reserve |
|
|
|
| Accumulated
loss |
|
(81,954,918) |
(31,678,852) |
|
|
|
------------------ |
------------------ |
|
|
|
(79,567,127) |
(29,291,061) |
|
|
|
------------------ |
------------------ |
|
|
|
20,432,873 |
70,708,939 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
| TO
FINANCE LEASE |
|
5 |
165,444 |
300,166 |
|
| LONG
TERM DEPOSITS |
|
6 |
2,030,500 |
29,400,820 |
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term deposits |
|
7 |
128,612,292 |
145,932,726 |
|
| Short
term finances |
|
8 |
50,555,638 |
61,897,300 |
|
| Creditors,
accrued and other liabilities |
9 |
71,779,938 |
52,011,922 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
250,947,868 |
259,841,948 |
|
| CONTINGENCIES
AND COMMITMENTS |
10 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
273,576,685 |
360,251,873 |
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
11 |
3,872,615 |
7,148,108 |
|
| LONG
TERM INVESTMENTS |
|
12 |
69,496,089 |
77,911,664 |
|
| LONG
TERM LOANS AND ADVANCES |
13 |
46,627,967 |
111,203,827 |
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
14 |
44,000 |
294,000 |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Short
term investments |
|
15 |
15,000,000 |
25,000,000 |
|
| Loans
and advances |
|
16 |
30,006,631 |
34,620,516 |
|
| Income
accrued and receivables |
|
17 |
39,907,119 |
41,500,433 |
|
| Advances,
deposits, prepayments and other receivables |
18 |
49,948,015 |
42,710,978 |
|
| Cash
and bank balances |
|
19 |
18,674,249 |
19,862,347 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
153,536,014 |
163,694,274 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
273,576,685 |
360,251,873 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| The
auditors' report is annexed hereto. |
|
|
|
Syed Naveed H. Zaidi |
|
M.A. Rehmani |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
| INCOME |
|
|
|
| Income
from bank deposits |
|
|
3,114,601 |
7,301,958 |
|
| Income
from loans and advances |
|
|
17,498,505 |
25,964,188 |
|
| Income
from investments in government securities |
|
2,081,630 |
2,450,362 |
|
| Commission
and fees |
|
|
2,217,541 |
2,589,780 |
|
| Remission
of loan |
|
|
-- |
22,521,341 |
|
| Dividend
income |
|
|
674,657 |
302,619 |
|
| Gain
on sale of fixed assets |
|
|
224,242 |
104 |
|
| Other income |
|
|
182,580 |
2,004,272 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
25,993,756 |
63,134,624 |
|
|
|
| EXPENDITURE |
|
| Return
on deposits, borrowings and running finance |
33,915,640 |
37,871,995 |
|
| Loss
on settlement of loan, mark-up and commission |
20 |
21,440,956 |
14,560,841 |
|
| Administrative
and operating |
|
21 |
10,344,964 |
11,181,098 |
|
| Loss
on sale of shares and certificates |
|
1,928,749 |
6,000,000 |
|
| Loss
on sale of property |
|
22 |
3,298,523 |
-- |
|
| Provision
for doubtful loans |
|
|
140,225 |
1,192,065 |
|
| Provision
for doubtful receivables |
|
120,636 |
700,773 |
|
| Provision
for diminution in value of long term investments |
4,864,456 |
3,767,950 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
76,054,149 |
75,274,722 |
|
|
|
|
------------------ |
------------------ |
|
| Loss
before taxation |
|
|
(50,060,393) |
(12,140,098) |
|
|
| Provision
for taxation |
|
| -Current year |
|
|
130,000 |
200,000 |
|
| -prior year |
|
|
85,673 |
1,791,396 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
215,673 |
1,991,396 |
|
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
|
(50,276,066) |
(14,131,494) |
|
| Profit/(loss)
brought forward |
|
|
(31,678,852) |
(17,547,358) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(81,954,918) |
(31,678,852) |
|
|
|
|
========== |
========== |
|
| Basic
loss per share |
|
26 |
(5.03) |
(1.41) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| The
auditors' report is annexed hereto. |
|
|
|
Syed Naveed H. Zaidi |
|
M.A. Rehmani |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Return,
commission and other receipts |
|
24,975,471 |
38,310,560 |
|
| Return
on deposits, borrowings and running finance |
(33,915,640) |
(37,871,995) |
|
| Administrative
and operating expenses |
|
(9,574,815) |
(9,918,042) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(18,514,984) |
(9,479,477) |
|
|
| (Increase)/decrease
in assets- |
|
| Loans
and advances |
|
|
63,777,325 |
90,813,745 |
|
| Income
accrued and receivables |
|
|
(5,375,446) |
(7,888,103) |
|
| Advances,
deposits, prepayments and other receivables |
(17,326,225) |
8,798,383 |
|
|
| Increase/(decrease)
in liabilities- |
|
| Deposits |
|
|
(44,690,754) |
(82,546,984) |
|
| Creditors,
accrued and other liabilities |
|
20,035,326 |
21,156,160 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from operating activities before tax |
|
(2,094,758) |
20,853,724 |
|
| Income tax paid |
|
(104,170) |
(42,944) |
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from/(used in) operating activities |
(2,198,928) |
20,810,780 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Dividend
received |
|
|
674,657 |
302,619 |
|
| Purchase
of fixed assets |
|
|
(46,000) |
(47,000) |
|
| Proceeds
from sale of fixed assets and property |
|
615,000 |
180,000 |
|
| Proceeds
from sale of investments |
|
26,622,370 |
-- |
|
| Purchase
of investments |
|
|
(15,000,000) |
(18,000,000) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from/(used in) investing activities |
12,866,027 |
(17,564,381) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Short
term finances |
|
|
(11,341,662) |
(37,724,730) |
|
| Repayment
of obligations trader finance lease |
|
(513,535) |
(834,860) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from/(used in) financing activities |
(11,855,197) |
(38,559,590) |
|
|
|
|
------------------ |
------------------ |
|
| Net
decrease in cash and cash equivalents |
|
(1,188,098) |
(35,313,191) |
|
| Cash
and cash equivalents at the beginning of the year |
19,862,347 |
55,175,538 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
18,674,249 |
19,862,347 |
|
|
|
|
========== |
========== |
|
|
|
Syed Naveed H. Zaidi |
|
M.A. Rehmani |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| Asset
Investment Bank Limited was incorporated in Pakistan on June 09, 1992 as a
public limited |
|
| company
and is listed on the Karachi, Lahore and Islamabad stock exchanges. The
company is |
|
| principally
engaged in the business of investment banking under the provisions of SRO
585(1)/87 |
|
| dated
July 13, 1987 issued by the ministry of finance, Government of Pakistan. |
|
|
| 2.
GOING CONCERN ISSUE |
|
| The
company's current financial position is not sound and unless additional
capital is raised and new |
|
| funds
are available for gainful employment, it would affect its status of a going
concern. The Company |
|
| is
negotiating with few local and foreign investors to inject additional capital
into the business and for |
|
| investments
in various projects, and it is confident that these funds will be available
for gainful |
|
| employment
and discharging its current liabilities. |
|
|
| 3.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 3.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
|
|
| 3.2
Tangible fixed assets and depreciation |
|
| Tangible
fixed assets are stated at cost less accumulated depreciation. Depreciation
on all |
|
| operating
fixed assets is charged to income on reducing balance method at the rates
given in |
|
| note 11. |
|
|
|
|
|
|
| Full
year's depreciation is provided in the year of purchase and no depreciation
is charged on |
|
| assets
deleted during the year. |
|
|
|
|
|
|
| Minor
renewals or replacements, maintenance, repair, gains or losses on disposal of
fixed assets |
|
