| Modaraba Al-Tijarah |
|
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|
|
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| Annual
Report 2000 |
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| CONTENTS |
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| Corporate
Information |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Certificate Holdings |
|
| Notice
of Meeting |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARDS
OF DIRECTORS |
|
|
| Mr.
Syed Iradat Husain |
Chairman |
|
| Mr.
Maqbool Hussain |
Managing Director &
Vice Chairman |
|
| Mr.
Mohammad Kamil |
Director |
|
| Mr.
Ashraf Kalam |
Director |
|
| Mr.
Ahmad H.I. Dada |
Director |
|
| Mr. Imdad Ali |
|
Director |
|
| Mr.
Faisal Hussain |
Director |
|
| Mr.
Zafar H. Naqvi |
Chief Executive |
|
|
| MANAGEMENT
TEAM |
|
| Mr.
Zafar H. Naqvi |
Chief Executive |
|
| Mr.
S. Shakeel-ur-Rehman |
Chief Manager |
|
| Mr.
S. Masood Akhter |
Chief Manager |
|
| Mr. D.V. Karia |
|
Chief Manager |
|
| Mr.
Omair Jamal |
Company Secretary |
|
|
| AUDITORS |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
| Finlay House |
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| I.I.
Chundrigar Road Karachi. |
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|
| BANKERS
& FINANCERS |
|
| Muslim
Commercial Bank Limited |
|
| Metropolitan
Bank Limited |
|
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| REGISTERED
OFFICE |
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| 10th
Floor, Progressive Square |
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| Opposite
Nursery, Sharae Faisal, Karachi. |
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| Phones:
4547521-5 Fax: (92-21) 4547526 |
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|
| DIRECTOR'S
REPORT |
|
|
| The
Board of Directors of Al-Mal Corporation Limited have pleasure in presenting
Ninth Annual Report |
|
| Of
Modaraba Al-Tijarah together with Audited Accounts for the year ended June
30, 2000. |
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| 1.
OPERATING RESULTS: |
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|
|
| A
summary of the operating results for the year ended 30th June, 2000 are
presented as under:- |
|
|
|
|
|
|
(Rs. in
"000") |
|
|
|
2000 |
1999 |
|
|
| Profit
after taxation |
|
1,319 |
170 |
|
|
|
========== |
========== |
|
| Operating
(Loss) / income |
|
|
(3,970) |
3,014 |
|
| Operating cost |
|
|
(2,049) |
(2,086) |
|
| Musharika
profit distribution |
|
|
-- |
(1,175) |
|
|
|
------------------ |
------------------ |
|
| Other income |
|
(6,019) |
(247) |
|
|
|
451 |
177 |
|
|
------------------ |
------------------ |
|
| Provision
for doubtful debts |
|
(5,568) |
(70) |
|
|
|
(971) |
(946) |
|
| Provision
for diminution in value of stock in trade |
(249) |
-- |
|
| Provision
written back |
|
8,218 |
1,690 |
|
| Profit
before taxation |
|
|
------------------ |
------------------ |
|
| Taxation |
|
|
1,430 |
674 |
|
|
|
(111) |
(504) |
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
1,319 |
170 |
|
| Loss
brought forward |
|
(49,338) |
(49,474) |
|
|
------------------ |
------------------ |
|
|
|
(48,019) |
(49,304) |
|
| Transfer
to statutory reserves |
|
(132) |
(34) |
|
|
|
------------------ |
------------------ |
|
| Loss
carried to the balance sheet |
|
(48,151) |
(49,338) |
|
|
|
========== |
========== |
|
| Earnings
per certificate |
|
|
0.17 |
0.02 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 2.
STATUTORY RESERVE |
|
| In
accordance with the Prudential Regulation for Modarabas issued by Securities
& Exchange |
|
| Commission
of Pakistan, your Directors have decided to appropriate 10% of the current
year profit |
|
| to
Statutory Reserves. |
|
|
|
|
| 3.
BUSINESS OPERATIONS |
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| In
view of past losses your Directors continued to pursue policy of cautious
optimism for |
|
| undertaking
new business with good profit margin, and minimum risk. The Modaraba has
managed |
|
| to
earn after tax profit of Rs. 1.32 million during the year under review as
compared to Rs. 170 |
|
| thousand
during the preceding year. As decided last year by Modaraba Management
Company |
|
| to
support business operation of the Modaraba, your Modaraba received first
tranch of Rs. 1.50 |
|
| million
as long term interest free loan from its management company. It was also
decided to |
|
| disinvest
a reasonable portion of non performing investments of equity stock. The sale
proceeds |
|
| from
investments and support from management company enabled the Modaraba to repay
its |
|
| liability
of about Rs. 6.00 million towards its associated Modaraba under Musharika
financing |
|
| agreement
and thereby reduced financing cost. The un-utilized portion of export quota
was also |
|
| sold
at a profit of Rs. 473 thousand, besides, income of Rs. 406 thousand and Rs.
1.0 million |
|
| were
earned on account of commission and dividend respectively. |
|
|
| Your
Modaraba continues to book reasonably sound export business of garments and
is exploring |
|
| new
avenues of business and markets. |
|
|
|
| 4.
FUTURE PROSPECTS |
|
|
|
| During
last two years Modaraba concentrated on accumulation of working capital for
establishment |
|
| of
some consistent business ventures, like export of garment and import of
finished items. |
|
|
| The
government is emphasizing on increase in export to curb adverse trade
balance. This policy |
|
| will
certainly put a positive impact on Modaraba's export business. Keeping in
view turn around |
|
| and
growth seen in last two years, we expect that Modaraba will continue to
progress gradually |
|
| and
come out of its problems with the dedicated interest free funding support of
its management |
|
| company. |
|
|
|
|
| 5. AUDITORS |
|
|
|
| The
present auditors, Messrs Ford, Rhodes, Robson, Morrow, Chartered Accountants,
are due |
|
| for
retirement, and being eligible, offer themselves for re-appointment for the
year 2000-2001. |
|
|
| 6.
PATTERN OF CERTIFICATE HOLDINGS |
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| The
pattern of certificate holding is attached. |
|
|
| 7.
ACKNOWLEDGMENT |
|
|
| The
Directors take this opportunity to extend their appreciation and thanks to
Certificate holders |
|
| for
their trust in Modaraba, to the authorities for their guidance and to all
members of management |
|
| and
staff for their hard work and commitment. |
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|
|
|
On the behalf of the Board |
|
|
|
|
|
|
|
Syed Iradat Husain |
|
| Karachi:
Dated 17th November, 2000 |
|
Chairman |
|
|
|
|
| AUDITOR'S
REPORT TO THE CERTIFICATE HOLDERS |
|
|
| We
have audited the annexed balance sheet as at June 30, 2000 and the related
profit and loss account |
|
| and
statement of changes in financial position (cash flow statement), together
with the notes to the |
|
| accounts
for the year ended June 30, 2000 of MODARABA AL-TIJARAH which are Modaraba |
|
| Company's
(Al-Mal Corporation 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
Modaraba Al-Tijarah 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 |
|
| conformity
with the Modaraba Companies and Modaraba (Floatation 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 (cash flow statement), 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,
2000 and the profit and the changes in the financial position (cash flow
statement) 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. |
|
|
|
|
Ford, Rhodes, Robson, Morrow |
|
| Karachi:
27th November, 2000 |
|
Chartered Accountants |
|
|
|
|
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|
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|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
| ASSETS |
|
|
|
|
| NON-CURRENT
ASSETS |
|
|
| Tangible
fixed assets |
|
3 |
4,962,092 |
5,850,028 |
|
| Long-term
investments |
|
4 |
4,630,967 |
6,306,543 |
|
| Deferred
expenditure |
|
5 |
358,493 |
1,298,368 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,951,552 |
13,454,939 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stock-in-trade |
|
6 |
12,233,600 |
14,517,018 |
|
| Marketable
securities |
|
7 |
2,068,814 |
1,534,486 |
|
| Trade debts |
|
8 |
-- |
-- |
|
| Short-term
Musharaka |
|
9 |
2,439,554 |
2,783,741 |
|
| Short-term
Morabaha |
|
10 |
-- |
221,225 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
11 |
4,549,635 |
3,747,059 |
|
| Cash
and bank balances |
|
12 |
4,692,525 |
573,104 |
|
|
------------------ |
------------------ |
|
|
25,984,128 |
23,376,633 |
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
35,935,680 |
36,831,572 |
|
|
========== |
========== |
|
|
|
|
| EQUITY
AND LIABILITIES |
|
|
|
|
| CAPITAL
AND RESERVES |
|
| Certificate
capital |
|
| Authorised
- 10,000,000 (1999: 10,000,000) |
|
| modaraba
certificates of Rs. 10 each |
|
100,000,000 |
100,000,000 |
|
| Issued,
subscribed and paid-up |
|
13 |
75,778,150 |
75,778,150 |
|
| Reserves |
|
|
|
|
| Capital reserve |
|
|
|
|
|
| Statutory
reserves |
|
14 |
488,297 |
356,352 |
|
| Revenue
reserve |
|
|
|
|
| Accumulated
losses |
|
|
(48,150,562) |
(49,338,067) |
|
|
|
|
------------------ |
------------------ |
|
|
28,115,885 |
2,679,643.50 |
|
|
|
|
|
| NON-CURRENT
LIABILITIES |
|
| Long
term advance |
|
16 |
1,500,000 |
-- |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Short
term musharaka |
|
|
-- |
5,940,000 |
|
| Creditors,
accrued and other liabilities |
17 |
5,908,804 |
3,675,578 |
|
| Unclaimed
profit distribution |
|
|
410,991 |
419,559 |
|
|
|
------------------ |
------------------ |
|
|
|
6,319,795 |
10,035,137 |
|
| COMMITMENT
AND CONTINGENCIES |
18 |
|
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
EQUITY AND LIABILITIES |
|
35,935,680 |
36,831,572 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Managing Director |
|
Chairman |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
| Operating
(loss) / income |
|
19 |
(3,969,847) |
3,014,272 |
|
|
| Operating
costs |
|
20 |
2,048,600 |
2,085,829 |
|
| Musharaka
profit distribution |
|
|
-- |
1,175,203 |
|
|
------------------ |
------------------ |
|
|
|
|
2,048,600 |
3,261,032 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(6,018,447) |
(246,760) |
|
| Other income |
|
21 |
450,752 |
176,971 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(5,567,695) |
(69,789) |
|
| Provision
written back |
|
22 |
6,998,486 |
743,905 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
1,430,791 |
674,116 |
|
| Taxation |
|
23 |
111,341 |
503,574 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
1,319,450 |
170,542 |
|
| Accumulated
losses brought forward |
|
(49,338,067) |
(49,474,501) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(48,018,617) |
(49,303,959) |
|
| Transfer
to statutory reserve: 10% (1999: 20%) |
|
(131,945) |
(34,108) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
losses carried forward |
|
48,150,562 |
(49,338,067) |
|
|
|
|
========== |
========== |
|
| Earning
per certificate |
|
24 |
0.17 |
0.02 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Managing Director |
|
Chairman |
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
1,430,791 |
674,116 |
|
|
|
| Adjustments
for: |
|
| Depreciation |
|
|
586,913 |
481,639 |
|
| Amortization
of deferred expenditure |
|
282,336 |
649,184 |
|
| Gain
on sale of assets |
|
(8,200) |
-- |
|
| Provision
for diminution in value of stock-in trade |
248,918 |
-- |
|
| Loss
on sale of long-term investments |
|
5,938,362 |
217,449 |
|
| Provision
-write-back on long-term investments |
|
(7,173,979) |
(1,587,888) |
|
| Profit
on sale of export quota |
|
(472,761) |
(53,920) |
|
| Financial
charges |
|
-- |
1,175,203 |
|
| Dividend |
|
|
(1,138,609) |
(234,262) |
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
(1,737,020) |
647,405 |
|
|
------------------ |
------------------ |
|
| Operating
profit before changes in |
|
| operating
assets/liabilities |
|
|
(306,229) |
1,321,521 |
|
|
| (Increase)/decrease
in operating assets |
|
| Stock-in-trade |
|
|
2,034,500 |
716,728 |
|
| Marketable
securities |
|
|
(534,328) |
(14,206) |
|
| Trade debts |
|
|
-- |
1,923,245 |
|
| Short-term
Musharaka |
|
|
344,187 |
669,781 |
|
| Short-term
Morabaha |
|
|
221,225 |
179,574 |
|
| Advance,
deposits, prepayment and other receivables |
|
|
| excluding
advance tax and dividend |
|
(825,815) |
568,587 |
|
|
|
|
------------------ |
------------------ |
|
|
|
1,239,769 |
4,043,709 |
|
|
| (Decrease)/Increase
in operating liabilities |
|
| Short-term
Musharaka |
|
(5,940,000)] |
-- |
|
| Creditors,
accrued and other liabilities |
|
3,342,275 |
(3,275,361 |
|
|
|
------------------ |
------------------ |
|
|
|
(2,597,725) |
(3,275,361) |
|
|
|
------------------ |
------------------ |
|
| Cash
(outflow)/inflow from operating activities |
|
(1,664,185) |
2,089,869 |
|
| Financial
charges paid |
|
(1,139,532) |
(35,671) |
|
| Income-tax paid |
|
(91,009) |
(804,943) |
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from operating activities Total c/f |
(2,894,726) |
1,249,255 |
|
|
========== |
========== |
|
|
|
| Net
cash (outflow)/inflow from operating |
|
| activities
Total b/f. |
|
(2,894,726) |
1,249,255 |
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets |
|
|
(40,777) |
(2,132,570) |
|
| Proceeds
from sale of fixed assets |
|
350,000 |
-- |
|
| Proceeds
from sale of long-term investments |
|
2,911,193 |
503,960 |
|
| Proceeds
from sale of export quota |
|
1,486,270 |
81,868 |
|
| Profit
received on bank deposits |
|
|
30,483 |
80,187 |
|
| Dividend
received |
|
|
1,141,516 |
311,627 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from investing activities |
5,878,685 |
(1,154,928) |
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long
term advance |
|
1,500,000 |
-- |
|
| Profit paid |
|
(8,568) |
-- |
|
| Deferred
expenditure paid |
|
(355,970) |
(1,975,500) |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from financing activities |
(1,135,462) |
(1,975,500) |
|
|
|
------------------ |
------------------ |
|
| NET
INCREASE/(DECREASE) IN CASH |
|
| AND
CASH EQUIVALENTS |
|
|
4,119,421 |
(1,881,173) |
|
| CASH
AND CASH EQUIVALENTS AT |
|
|
| BEGINNING
OF THE YEAR |
|
|
573,104 |
2,454,277 |
|
| CASH
AND CASH EQUIVALENTS AT |
|
------------------ |
------------------ |
|
| END
OF THE YEAR |
|
12 |
4,692,525 |
573,104 |
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Managing Director |
|
Chairman |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| Modaraba
Al-Tijarah is a multipurpose, perpetual Modaraba formed in July, 1991 under
the Modaraba |
|
| Companies
and Modaraba (Floatation and Control) Ordinance, 1980, and Modaraba Companies |
|
| and
Modaraba Rules, 1981 and is managed by Al-Mal Corporation Limited. It is
engaged in the |
|
| business
of trading and manufacturing on its own account, providing musharaka,
morabaha finances, |
|
| purchase
and sale of securities and other related business. It is listed on the
Karachi, Lahore and |
|
| Islamabad
Stock Exchanges. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 2.1
Accounting Convention |
|
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Staff retirement benefits |
|
|
| (a)
Staff gratuity |
|
| The
modaraba participates in an approved group funded gratuity scheme for all its |
|
| employees,
who have completed minimum qualifying period of service. Contribution to |
|
| the
fund have been made on the basis of actuarial recommendation at the rate of
8.33 |
|
| percent
per annum, of basic salaries. The actuarial valuation is normally carried out
once |
|
| in
every three years. The latest valuation was carried out as at June 30, 1999.
The fair |
|
| value
of the scheme's assets and liabilities of past services of the employees
relating |
|
| to
the modaraba at the latest valuation date were Rs. 0.015 million and Rs.
0.023 million |
|
| respectively.
The projected unit credit method using the following significant assumption |
|
| is
used for the valuation of the scheme. |
|
|
| -
Expected long term rate of increase in salaries level 12 percent per annum |
|
|
| -
Expected long term rate of interest 12 percent per annum. |
|
|
| -
Discount rate used to determine the actuarial present value is 12 percent per
annum. |
|
|
| (b)
Staff provident fund |
|
| The
modaraba contribute to an approved group provident fund scheme covering all
its |
|
| employees
who are eligible under the scheme. Equal monthly contributions are made by |
|
| the
modaraba and the employees to the fund. |
|
|
| 2.3
Tangible fixed assets |
|
|
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to
income |
|
| applying
the straight line method whereby the cost of an asset is written off over its
estimated |
|
| useful
life. In respect of additions and disposals during the year, depreciation is
charged |
|
| proportionately
for the period of use. Gain or loss disposal of assets, if any, is included
in |
|
| income
currently. |
|
|
|
|
| 2.4
Long-term investments |
|
| These
are stated at cost. Provision is made for decline other than temporary, if
any, in the |
|
| value
of these investments. |
|
|
| 2.5
Deferred expenditure |
|
|
|
| Expenses
incurred in connection with the expenses on purchase of export quota are |
|
| amortised
over three years effective from the year of its purchase. |
|
|
| 2.6
Stock-in-trade |
|
|
|
|
|
|
| 2.6.1
Stock-in-trade is valued at the lower of cost and net realisable value. |
|
|
|
|
| 2.6.2
Cost signifies in relation to: |
|
|
|
|
|
| - Trading stock |
|
- weighted average cost. |
|
|
|
|
| -
Stock-in-transit |
- actual cost
comprising invoice value plus other |
|
|
charges thereon. |
|
|
|
|
|
| 2.7
Marketable securities |
|
| These
are carried at lower of moving average cost and market value determined on an |
|
| aggregate
portfolio basis. Gain or loss on sale of investments is accounted for in the
year |
|
| in
which it arises. |
|
|
|
|
| 2.8
Foreign currency translation |
|
| Assets
and liabilities in foreign currencies are translated into rupees at the rates
of exchange |
|
| approximating
to those prevalent on the balance sheet date. Exchange gains or losses are |
|
| taken
to income currently. |
|
|
|
| 2.9 Taxation |
|
|
|
|
|
|
|
| Current |
|
|
|
| Provision
for current taxation is based on taxable income at current rates of taxation
after |
|
| taking |
