| Al-Mal Securities & Services Limited |
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Directors'
Report |
|
| Chief
Executive's Review |
|
| Auditors'
Report |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
| Notice
of Meeting |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors: |
|
|
|
| Mr.
S. Iradat Husain |
|
| Chairman |
|
|
| Mr.
Maqbool Hussain |
|
| Vice Chairman |
|
|
| Mr.
Ahmad H.I. Dada |
|
| Director |
|
|
| Mr.
Amanullah Suleman |
|
| Director |
|
|
| Mr.
Tariq Jamil Khan |
|
| Director |
|
|
| Mr.
Mohammad Shoaib |
|
| Director
(Nominee of PKIC) |
|
|
| Mr.
Rizwanullah Kherati |
|
| Director
(Nominee of PKIC) |
|
|
|
| Mr.
Mohammad Azeem Khan |
|
| Chief Executive |
|
|
| Management
Team: |
|
| Mr.
Mohammad Azeem Khan |
|
| Miss.
Farhat Yasmin |
|
| Mr.
M. Ahsan Hashmi |
|
| Mr.
Ghous Baksh Malhan |
|
|
| Company
Secretary: |
|
| Mr. D.V. Karia |
|
|
| Bankers: |
|
| Muslim
Commercial Bank Limited |
|
| Askari
Commercial Bank Limited |
|
| Bank
Al-Habib Limited |
|
|
| Auditors: |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
| Finlay
House, I.I. Chundrigar Road, Karachi. |
|
|
| Registered
Office: |
|
| 10th
Floor, Progressive Square, Nursery |
|
| Sharea
Faisal, Karachi. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
directors have pleasure in submitting herewith their Report and Audited
Accounts together with |
|
| Auditors'
Report of the Company for the year ended 30th June, 2000. |
|
|
|
|
2000 |
1999 |
|
| 1.
Operating Results: |
|
Rupees |
Rupees |
|
| (Summarized
results for the year |
|
| under
report are as under) |
|
|
| * Total operating income |
|
13,560,477 |
7,914,464 |
|
|
|
------------------ |
------------------ |
|
| * Profit for the year before tax |
|
6,934,926 |
2,019,326 |
|
|
|
------------------ |
------------------ |
|
| *
Net Profit for the year after tax |
|
6,854,979 |
1,969,125 |
|
| *
Proposed Dividend @ 7.5% (1999: Nil) |
|
(3,750,000) |
-- |
|
|
|
------------------ |
------------------ |
|
| *
Accumulated Profit/(Loss) brought forward |
|
3,104,979 |
1,969,125 |
|
| *
Accumulated Profit/(Loss) carried forward |
|
(20,232,954) |
(22,202,079) |
|
|
|
------------------ |
------------------ |
|
| *
Accumulated Profit / (Loss) carried forward |
|
(17,127,975) |
(20,232,954) |
|
|
========== |
========== |
|
| * Earning per share |
|
1.37 |
0.39 |
|
|
========== |
========== |
|
|
| 2.
Chief Executive's Review: |
|
|
| The
Chief Executive's review deals with the business activities and operating
results of the Company |
|
| during
the year and future outlook. |
|
|
|
|
|
| The
directors endorse the contents of the report. |
|
|
|
|
|
| 3. Dividend |
|
|
|
| The
directors are pleased to announce distribution of cash dividend @ 7.5% i.e.
Rs. 0.75 per |
|
| share
from the net profit for the year notwithstanding accumulated losses of
previous years. This |
|
| step
has been taken with a view to offering some return to the shareholders, who
have infact |
|
| waited
for a long time ever since public floatation of shares and also to meet the
listing requirement |
|
| of
Stock Exchanges, so as to avoid being quoted on "Defaulters"
counter. In this manner a sum |
|
| of
Rs. 3.750 million will be paid out as cash dividend while the balance amount
of Rs. 3.105 million |
|
| has
been carried forward to reduce the accumulated losses arisen mainly due to
diminution in |
|
| value
of long-term investments. |
|
|
|
|
|
| 4.
Pattern of share holding is attached: |
|
|
|
|
|
| 5. Auditors: |
|
|
|
| The
present auditors M/s Ford, Rhodes, Robson, Morrow, Chartered Accountants
retire and being |
|
| eligible
offer themselves for re-appointment. |
|
|
|
| 6.
Acknowledgement: |
|
|
|
| The
directors wish to place on record their appreciation and thanks to
shareholders and customers |
|
| for
their continued confidence in the Company, the Securities & Exchange
Commission of Pakistan |
|
| and
the Stock Exchanges for their guidance, and to all the members of the
management and staff |
|
| for
their dedication and hard work. |
|
|
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
| October 4, 2000 |
|
|
MAQBOOL HUSSAIN |
|
| Karachi |
|
|
Vice Chairman |
|
|
|
| CHIEF
EXECUTIVE'S REVIEW |
|
|
| I
am pleased to present the Seventh Annual Report of Al-Mal Securities &
Services Limited, as public |
|
| listed
company, together with the Audited Accounts for the year ended 30th June
2000. The Company |
|
| is
listed at all the three stock exchanges of the country for the convenience of
its shareholders. |
|
|
| Results
of the Operations |
|
| During
the current financial year the market after going through initial turbulent
period have shown signs |
|
| of
stability. The index which was 1055 as on 30th June 1999 improved to 1520 as
on 30th June 2000. |
|
|
| During
the current financial year the sanctions imposed were not lifted (just eased
a bit) and there were |
|
| no
new loans from I.M.F. The dispute of Hubco is yet to be resolved. However,
there are signs that |
|
| sincere
attempts are being made from both the sides to resolve this complicated
dispute. The financial |
|
| year
saw the beginning of the documentation of economy, which although welcomed in
principle, is still |
|
| a
cause of concern for the investors. |
|
|
| During
the second half of the financial year there was a sudden upsurge in the
market and the index |
|
| went
up to 2054 in the month of March 2000. A large number of investors and also
members of all. |
|
| the
three stock exchanges in Pakistan fell prey to this situation. Some of the
members lost their |
|
| membership
cards and the investors also suffered very heavily. For the first time the
stock market in |
|
| Karachi,
Lahore & Islamabad were closed to settle the thorny issues, This was not
a good omen for |
|
| the
stock markets. However, the management of stock exchanges and the Securities
& Exchange |
|
| Commission
of Pakistan brought the situation under control. The Securities &
Exchange Commission |
|
| had
setup an inquiry into this episode and has now brought in new rules to
control the stock market |
|
| operations
and safeguard the investors interest. |
|
|
| In
the wake of all this turbulence your company has been able to perform well.
We have been cautious |
|
| in
our approach and this has yielded some good results. |
|
|
| Our
major revenue emanates from brokerage business. Our commission income for the
year is |
|
| Rs.
10,586,092 as against Rs. 6,949,787 during the year 1998-1999· This reflects
net rise of |
|
| Rs.
3,636,305. We are committed to further develop this solid base of our
customers. |
|
|
| As
we mentioned in our last year's report that we were going to focus on short
term trading and are |
|
| now
happy to report that during the current financial year our capital gain on
shares was Rs. 1,735,039 |
|
| as
against last year's figure of Rs. 255,255. |
|
|
| Dividend
disclosures in the corporate sector also showed improvement and our dividend
income this |
|
| year
was Rs. 462,659 as against Rs. 236,207 during the financial year 1998-1999. |
|
|
| Overall
revenue figure improved from Rs. 7,914,464 in 1998-1999 to Rs. 13,560,477 in
1999-2000. |
|
| This
is an exceptional improvement and we thank Almighty Allah for His help and
guidance. |
|
|
| Our
expenses, as always, have been in proper check, and during the year minimal
increase of 9.86% |
|
| has
been reflected. We feel that in the present conditions and without impairing
efficiency we have |
|
| been
able to keep our expenses within control. |
|
|
| Future Outlook |
|
| As
mentioned above the market suffered a severe blow in April / May this year.
It has still not recovered |
|
| fully
from its effects. Economy in general is being documented and this covers the
business at the stock |
|
| market
as well. Investors will take time to digest this new approach. However this
is going to bring with |
|
| it
much stability in the market in future years. The matter of Hubco is being
resolved because of the |
|
| personal
intervention of the Chief Executive of the country. A new I.M.F. standby
facility is around the |
|
| corner
and we hope the worst is over now. All the more, the very inherent nature of
the business is |
|
| risky,
hence your management will strive to adopt a reasonable risk management
strategy. |
|
|
| October 4, 2000 |
|
|
M. AZEEM KHAN |
|
| Karachi |
|
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of AL-MAL SECURITIES AND SERVICES
LIMITED as at |
|
| June
30, 2000 and the related profit and loss account, cash flow statement and
statement of changes |
|
| in
equity together with the notes forming part thereof, for the year then ended
and we state that we |
|
| have
obtained all the information and explanations which, to the best of our
knowledge and belief, were |
|
| necessary
for the purposes of our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express |
|
| an
opinion on these statements based on our audit. |
|
|
| We
conducted our audit n accordance with the auditing standards as applicable in
Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements are free of any material misstatement. An audit
includes examining, on a |
|
| test
basis, evidence supporting the amounts and disclosures in the above said
statements. An audit |
|
| also
includes assessing the accounting policies and significant estimates made by
management, as well |
|
| as,
evaluating the overall presentation of the above said statements. We believe
that our audit provides |
|
| a
reasonable 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
required by the Companies |
|
| Ordinance,
1984; |
|
|
|
|
|
|
| (b)
in our opinion; |
|
|
|
|
|
|
| (i)
the Balance Sheet and Profit and Loss Account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with |
|
| the
books of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
|
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of Company's
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year |
|
| were
in accordance with the objects of the Company; |
|
|
|
|
| (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 statement and statement
of changes |
|
| in
equity together with the notes forming part thereof conform with approved
accounting |
|
| standards
as applicable in Pakistan, and, give the information required by the
Companies |
|
| Ordinance,
1984, in the manner so required and respectively give a true and fair view of
the |
|
| state
of the company's affairs as at June 30, 2000 and of the profit, its cash flow
and changes |
|
| in
equity for the year then ended; and |
|
|
|
|
|
| (d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980 |
|
| (XVIII of 1980). |
|
|
|
|
| October 09, 2000 |
|
|
FORD, RHODES, ROBSON, MORROW |
|
| Karachi |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| EQUITY
AND LIABILITIES |
|
|
|
| CAPITAL
& RESERVES |
|
|
| Share Capital |
|
| Authorised |
|
| 5,000,000
ordinary shares of Rs. 10/- each |
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
|
| Issued,
subscribed and paid-up |
|
| 5,000,000
(1999: 5,000,000) ordinary shares |
|
| of
Rs. 10/- each fully paid in cash |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
|
|
| Accumulated
losses |
|
|
(17,127,975) |
(20,232,954) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,872,025 |
29,767,046 |
|
|
| NON-CURRENT
LIABILITIES |
|
| Deferred
liability - staff gratuity |
|
|
1,744,850 |
1,168,200 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Creditors
and accrued liabilities |
|
11 |
7,879,690 |
8,549,110 |
|
| Proposed
dividend |
|
|
3,750,000 |
-- |
|
|
|
|
|
|
| COMMITMENT |
|
12 |
|
|
|
------------------ |
------------------ |
|
|
|
46,246,565 |
39,484,356 |
|
|
========== |
========== |
|
|
| ASSETS |
|
|
|
| NON-CURRENT
ASSETS |
|
|
|
| Tangible
fixed assets |
|
3 |
2,017,769 |
1,703,756 |
|
| Room
and membership card |
|
4 |
11,658,458 |
11,658,458 |
|
| Long
term investments |
|
5 |
4,549,531 |
3,955,690 |
|
| Long
term deposits and deferred costs |
6 |
336,500 |
213,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
18,562,258 |
17,530,904 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Short
term investments |
|
7 |
1,753,437 |
1,217,660 |
|
| Receivable
from customers |
|
8 |
10,972,711 |
3,570,767 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
9 |
1,008,351 |
7,329,195 |
|
| Cash
and bank balances |
|
10 |
13,949,808 |
9,835,830 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
27,684,307 |
21,953,452 |
|
|
|
|
------------------ |
------------------ |
|
|
46,246,565 |
39,484,356 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
M. Azeem Khan |
|
Maqbool Hussain |
|
|
Chief Executive |
|
Vice Chairman |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| OPERATING
INCOME |
|
| Brokerage
income |
|
|
10,586,092 |
6,949,787 |
|
| Other
operating income |
|
13 |
1,182,659 |
956,207 |
|
| Capital
gain on investments |
|
14 |
1,735,039 |
255,255 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
13,503,790 |
8,161,249 |
|
| OPERATING
AND ADMINISTRATIVE EXPENSES |
15 |
(7,926,398) |
(7,214,565) |
|
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
5,577,392 |
946,684 |
|
| OTHER
INCOME |
|
16 |
56,687 |
(246,785) |
|
| WRITE-BACK
OF PROVISION FOR DIMINUTION IN |
|
|
| VALUE
OF INVESTMENTS |
|
17 |
1,300,847 |
1,319,427 |
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
6,934,926 |
2,019,326 |
|
| Taxation |
|
|
18 |
(79,947) |
(50,201) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
6,854,979 |
1,969,125 |
|
|
|
|
|
|
|
| APPROPRIATION |
|
| Proposed
cash dividend @ 7.5% (1999: Nil) |
|
(3,750,000) |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,104,979 |
1,969,125 |
|
| Accumulated
losses brought forward |
|
(20,232,954) |
(22,202,079) |
|
|
|
------------------ |
------------------ |
|
| Accumulated
losses carried forward |
|
(17,127,975) |
(20,232,954) |
|
|
|
========== |
========== |
|
| Earning
per share |
|
21 |
1.37 |
0.39 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
M. Azeem Khan |
|
Maqbool Hussain |
|
|
Chief Executive |
|
Vice Chairman |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
6,934,926 |
2,019,326 |
|
|
|
|
|
|
|
|
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
|
|
411,009 |
380,695 |
|
|
| Profit/(loss)
on sale of long-term investments |
|
(23,089) |
319,421 |
|
|
| Loss
on sale of fixed assets |
|
|
3,183 |
265,926 |
|
|
| Amortization
of deferred costs |
|
|
|
364,150 |
|
|
| Write-back
for diminution in value |
|
-- |
|
|
|
| of investments |
|
|
(1,300,847) |
(1,319,427) |
|
|
| Provision
for gratuity |
|
|
618,039 |
431,525 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(291,705) |
442,290 |
|
|
|
------------------ |
------------------ |
|
|
| Operating
profit before working |
|
| capital changes |
|
|
|
6,643,221 |
2,461,616 |
|
|
|
|
|
|
|
|
|
| (Increase)
/ decrease in operating assets: |
|
| Short
term investments |
|
(423,808) |
-- |
|
| Receivable
from customers |
|
(7,401,944) |
679,662 |
|
| Advances,
prepayments and other receivables |
|
|
|
| excluding
taxation |
|
6,398,064 |
(6,358,344) |
|
|
|
------------------ |
------------------ |
|
|
|
(1,427,688) |
(5,678,682) |
|
|
------------------ |
------------------ |
|
|
|
|
5,215,533 |
(3,217,066) |
|
|
| Increase
/ (Decrease) in operating liabilities: |
|
| Creditors
and accrued liabilities |
|
|
(669,420) |
5,201,389 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Cash
generated from operations |
|
|
4,546,113 |
1,984,323 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
| Taxes paid |
|
|
|
(157,167) |
(67,857) |
|
|
| Gratuity paid |
|
|
|
(41,389) |
(67,525) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(198,556) |
(135,382) |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Net
cash from operating activities |
|
|
4,347,557 |
1,848,941 |
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
expenditure incurred |
|
(740,555) |
(476,904) |
|
|
| Long-term
deposits and deferred cost |
|
(123,500) |
56,400 |
|
|
| Sale
proceeds of fixed assets |
|
12,350 |
282,594 |
|
|
| Sale
proceeds of long-term-investments |
|
618,126 |
447,350 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) / inflow from investing activities |
|
(233,579) |
309,440 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| NET
INCREASE IN CASH AND |
|
| CASH
EQUIVALENTS |
|
4,113,978 |
2,158,381 |
|
| CASH
AND CASH EQUIVALENTS AT |
|
|
| BEGINNING
OF THE YEAR |
|
9,835,830 |
7,677,449 |
|
| CASH
AND CASH EQUIVALENTS |
|
------------------ |
------------------ |
|
| AT
END OF THE YEAR - note 10 |
|
13,949,808 |
9,835,830 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
M. Azeem Khan |
|
Maqbool Hussain |
|
|
Chief Executive |
|
Vice Chairman |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
Issued |
Revenue |
Total |
|
|
subscribed |
reserve |
|
|
|
& paid-up |
upappropriated |
|
|
|
capital |
profit / (loss) |
|
|
|
|
|
|
|
Rupees |
|
|
|
| Balance
as at July 1, 1998 |
|
50,000,000 |
(22,202,079) |
27,797,921 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Net
profit for the year |
|
-- |
1,969,125 |
1,969,125 |
|
| Balance
as at June 30, 1999 |
|
50,000,000 |
(20,232,954) |
29,767,046 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Net
profit for the year |
|
-- |
6,854,979 |
6,854,979 |
|
| Proposed
dividend |
|
-- |
(3,750,000 |
(3,750,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
-- |
3,104,979 |
3,104,979 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2000 |
|
50,000,000 |
(17,127,975) |
32,872,025 |
|
|
========== |
========== |
========== |
|
|
|
M. Azeem Khan |
|
Maqbool Hussain |
|
|
Chief Executive |
|
Vice Chairman |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| Al-Mal
Securities and Services Limited is a public limited company, incorporated on
19th May, |
|
| 1992
under the Companies Ordinance, 1984. It is engaged in the business of stock
brokerage, |
|
| investment
counselling and registrar services. It is Corporate Member of The Karachi
Stock |
|
| Exchange
(Guarantee) Limited. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
|
